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Calculate the net present value of the machine

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Question - A manufacturer is considering the purchase of a new processing machine. The initial cost of the machine will be $300 000. The expected increase in net cash inflow as a result of the purchase is $75 000 for the first year and $160 000 for each of the next two years. The machine will have a salvage value of zero. At a discount rate of 5%, calculate the net present value of the machine?

a. $54,758.

b. $41,201.

c. $68,934.

d. $354,758.

Reference no: EM132726285

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