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What is the net present value of selecting a new machine

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Reference no: EM132837363

Question - The Pan American Bottling Co. is considering the purchase of a new machine that would increase the speed of bottling and save money. The net cost of this machine is $69,000. The annual cash flows have the following projections.

Year Cash Flow

1 $28,000

2 32,000

3 34,000

4 20,000

5 17,000

Required -

a. If the cost of capital is 11 percent, what is the net present value of selecting a new machine?

b. What is the internal rate of return?

c. Should the project be accepted?

Reference no: EM132837363

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