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Find the net present value of the proposed project

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Question - (Ignore income taxes in this problem.) Riveros, Inc. is considering the purchase of a machine that would cost $120,000 and would last for eight years. At the end of eight years, the machine would have a salvage value of $29,000. The machine would reduce labor and other costs by $25,000 per year. Additional working capital of $9,000 would be needed immediately. All of this working capital would be recovered at the end of the life of the machine. The company requires a minimum pretax return of 18 percent on all investment projects. Find the net present value of the proposed project?

Reference no: EM132597880

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