Find the net present value of the investment in machine

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Net Present Value Method:

The management of Kunkel Company is considering the purchase of a $27,000 machine that would reduce operating costs by $7,00 per year, at the end of the machine's five year useful life, it will have zero scrap value. The company's required of rate return is 12%.

Question 1: Determine the net present value of the investment in the machine.

Question 2: What is the difference between the total, undiscounted cash inflows and cash outflows over the entire life of the machine.

Reference no: EM132562257

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