Assignment Gradebook ORION Downloadable eTextbook Brief Exercise 24-4 EYour answ
ID: 2596159 • Letter: A
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Assignment Gradebook ORION Downloadable eTextbook Brief Exercise 24-4 EYour answer is incorrect. Try again. Cantotting Corporation is considering the purchase of a new botting machine. The machine would cost S183,309 and has an estimated useful life of 8 years with ers salvage value Management estimates that the new boitiing machine will provide net annual cash flows of $30,000. Management also believes that the new botting machine will save the company money because I expected to be more reliable than other machines, and thus will reduce downtime. Assume a discount rate of 8. CICKhere to viem. Pytatie Calculate the net present value. (or the net present value is negative, use either a negative sign preceding the number og -45 or parentheses eg (45). Por calculation purposes, vse s decimal places as displayed in the factor table provided. Round present value anwerte o decimal places, ca. 125.) 17 tes present va How much would the reduction in downtime have to be worth in order for the project to be acceptable? (Round answer to o decimal places, e.g. 125.) 11000 CIICK If you would be to Show work for this question Open Shows Question Attempts: 1 of Sused sa FOR LATER SUBMIT ANSWER shartigt undantaon noooExplanation / Answer
CONCLUSION: THE NPV IS COMPARATIVELY LOW (-10281) WHICH WILL BE WIPED OFF NXT YEAR IF THE ASSETS EXISTS YET. CONSIDERABLE SAVINGS HAS NOT BEEN MEASURED THUS IT SHOWS THAT INSPITE OF THIS IT YET SHOWS PROMISE OF BEING EFFECTIVE
YEAR
OUTFLOWS
$
INFLOWS
$
NET
$
DCF
PV
$
0
-183399
-183399
1
-183339
1
+30000
+30000
.9259
27777
2
+30000
+30000
.8573
25719
3
+30000
+30000
.7938
23814
4
+30000
+30000
.7350
22050
5
30000
+30000
.6806
20418
6
30000
+30000
.6502
19506
7
30000
+30000
.5855
17565
8
30000
+30000
.5403
16209
173058
NPV
-10281
CONCLUSION: THE NPV IS COMPARATIVELY LOW (-10281) WHICH WILL BE WIPED OFF NXT YEAR IF THE ASSETS EXISTS YET. CONSIDERABLE SAVINGS HAS NOT BEEN MEASURED THUS IT SHOWS THAT INSPITE OF THIS IT YET SHOWS PROMISE OF BEING EFFECTIVE
YEAR
OUTFLOWS
$
INFLOWS
$
NET
$
DCF
PV
$
0
-183399
-183399
1
-183339
1
+30000
+30000
.9259
27777
2
+30000
+30000
.8573
25719
3
+30000
+30000
.7938
23814
4
+30000
+30000
.7350
22050
5
30000
+30000
.6806
20418
6
30000
+30000
.6502
19506
7
30000
+30000
.5855
17565
8
30000
+30000
.5403
16209
173058
NPV
-10281
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