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How do calculate the net present value of the machine

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Reference no: EM132608208

Marinis Corporation is considering buying a brand new machine and has gathered the following data:

Investment $105,900

Estimated life 5 years

Estimated annual cash inflows $30,100

Estimated annual cash outflows $10,200

Salvage value for the machine is estimated to be zero.

Question 1: Calculate the net present value of the machine assuming a 5% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124. Round present value answer to 0 decimal places, e.g. 125.)

Question 2: Should the company buy the machine based on your results?

Reference no: EM132608208

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