sourcetiff
Apr 23, 2009, 06:03 AM
A company considers purchase of new equipment for $45,000. The projected after-tax net income is $3,000 after deducting $15,000 depreciation. The machine has a useful life of 3 years and no salvage value. Management of the company requires 12% return on investment. The present value of an annuity of 1 for various periods are
period 1 .8929
Period 2 1.6901
Period 3 2.4018
what is the Net present value of this machine assuming all cash flows occur at year-end?
period 1 .8929
Period 2 1.6901
Period 3 2.4018
what is the Net present value of this machine assuming all cash flows occur at year-end?