A company is considering the purchase of new equipment for

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A company is considering the purchase of new equipment for $63,000. The projected after-tax net income is $3,600 after deducting $21,000 of depreciation. The machine has a useful life of 3 years and no salvage value. Management of the company requires a 11% return on investment. The present value of an annuity of 1 for various periods follows: Periods Present value of an annuity of 1 at 11% 1 0.9009 2 1.7125 3 2.4437 What is the net present value of this machine assuming all cash flows occur at year-end?

Reference no: EM13591633

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