Purchase price of the machine

Assignment Help Accounting Basics

Reference no: EM13127824

Stratford Company purchased a machine with an estimated useful life of seven years. The machine will generate cash inflows of $90,000 each year over the next seven years. If the machine has no salvage value at the end of seven years, and assuming the company's discount rate is 10%, what is the purchase price of the machine if the net present value of the investment is $170,000?

A. $221,950

B. $170,000

C. $268,120

D. $438,120

Reference no: EM13127824

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