Considering acquiring newer-more modern machine

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1. Scaland Corporation is considering acquiring a newer, more modern machine. The machine, which requires an initial outlay of $3 million, will generate cash flows of $1 million at the end of each year for 3 years. Investors could earn 10 percent elsewhere in opportunities of equal risk. Compute the net present value and explain what it means to investors.

2. Compute the net present value for the asset in (problem 1) if cash inflows are received at midyear.

Reference no: EM131973614

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