Compute the net present value of the investment

Reference no: EM131958016

Question: A company is considering investing in a new machine that requires a cash payment of $55, 948 today. The machine will generate annual cash flows of $22, 497 for the next three years. Assume the company uses an 10% discount rate. Compute the net present value of this investment. (FV of $1, PV of $1. FVA of $1 and PVA of $1)

Reference no: EM131958016

Questions Cloud

What salvage value must model : What salvage value (S) must Model -I have after 20 years in order for the equivalent uniform annual cost to equal $27,000?

What is the accounting break-even point : A company is considering a 5-year project that opens a new product line and requires an initial outlay of $75,000. The assumed selling price is $97 per unit.

Estimating the relevant cash flows : A company is considering a new project. The CFO plans to calculate the project's NPV by estimating the relevant cash flows for each year of the project's life.

Estimate the present value of the tax benefits : Your Company is considering a new project that will require $570,000 of new equipment at the start of the project.

Compute the net present value of the investment : A company is considering investing in a new machine that requires a cash payment of $55, 948 today. The machine will generate annual cash flows of $22,497.

Determine the maximum amount the company willing to pay : A company is considering the purchase of a system that will reduce annual operating costs by $10,000 per year for the next 15 years.

Determine the npv for fairways driving range : The company is considering operating a new driving range facility in Sanford, FL. In order to do so, they will need to purchase a ball dispensing machine.

What is the cash break-even point : A company is considering a 5-year project that opens a new product line and requires an initial outlay of $81,000. The assumed selling price is $98 per unit.

Would you expect the actual ror to be higher : Your company is considering the purchase of a diesel pile hammer for $250, 000. The annual operating cost of the equipment for the first year is $10,000.

User Account

All Pages