50.00 points is considering the purchase of a $24,000 machine that would reduce

Question

50.00 points is considering the purchase of a $24,000 machine that would reduce end of the machine's five-year useful life, it will have zero scrap The management of Kunkel Company operaling costs by $6,000 per year At the value. The company's required rate of return is 13%. Click here to view Exbibit 13B-1 and Exhibit 138-2 to determine the appropni table Required 1. Determine the net present value of the investment in the machine What is the difference between the total undiscounted cash intiows and cash outthows over the entire Cash Flow Years Annuat cost savings Initial investment Net cash fow

Explanation / Answer

Net present value = Present value of cash inflow-Presnet value of cash outflow

= 6000*3.517-24000

Net present value = -2898

Difference in cash inflow or cash outflow :

Items Cash flow Years Total cash flow Annual cost savings 6000 5 30000 Initial invesment (24000) 0 (24000) Net cash flow 6000

Related Questions

Navigate

• Browse (All)
• Browse 5
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.