A financial manager estimates the Present Value of the cash flows produced by a

Question

A financial manager estimates the Present Value of the cash flows produced by a machine to be $55,000. Which of the following is the most accurate statement that could be inferred from this estimate?

a. If the machine can be purchased for $55,000 today, the manager is indifferent to the investment

b. If the machine costs more than $55,000 today, this is not an attractive investment

c. The the machine can be purchased for less than $55,000 today, the investment should be made If the machine costs more than $55,000 today, this is not an attractive investment

d. All of the above are true

Explanation / Answer

If Present Value of the cash flows produced by a machine to be $55,000. the most accurate statement that could be inferred from this estimate = b. If the machine costs more than $55,000 today, this is not an attractive investment.

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