Calculate the net present value

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Reference no: EM133638015

Question

Our company is considering adding another machine for the manufacture of tractors. The machine would cost $865,000. It would have an estimated life of 4 years and no salvage value. The company estimates that annual cash inflows would increase by $100,500 and that annual cash outflows would increase by $115,000. Management has a required rate of return of 5%.

Calculate the net present value on this to see if this investment should be accepted.

Reference no: EM133638015

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