What is the machine net present value

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Reference no: EM133066818

Question - Crane Enterprises is considering investing in a new packing machine. The new machine will provide annual cash operating inflows of $10086 for 5 years. The cost of the machine is $34686 and it can be sold at the end of its 5-year useful life for $5576. Crane's required rate of return is 10%.

Type of cash flow

Periods

Interest rate

Factor

PV of $1

5

10%

0.6209

FV of $1

5

10%

1.6105

PV ordinary annuity

5

10%

3.7908

FV ordinary annuity

5

10%

6.1051

PV annuity due

5

10%

4.1699

Required - What is the machine's net present value?

Reference no: EM133066818

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