Minden Company’s required rate of return is 8%. The company can purchase a new machine at a cost of $40,300. The new machine would generate cash inflows of $14,000 per year and have a three-year life with no salvage value. Compute the machine’s net present value. (Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount. Negative amount should be indicated with minus sign. Omit the “$” sign in your response.)
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Question & Answer: Minden Company’s required rate of return is 8%. The company can purchase a new machine at a cost of $40…..
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|Net present value||$|
CALCULATE NET PRESENT VALUE :
Present value = Present value of cash inflow – Present value of cash outflow
Present value = (4222)