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What would be the net present value for michaels inc

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Michaels, Inc., purchased a machine for $75,000. The machine has a useful life of five years and no salvage value. Straight-line depreciation is to be used. The machine is expected to generate cash flow from operations, net of income taxes, of $25,000 in each of the five years. Michaels' expected rate of return is 10%. Information on present value factors is as follows:

Period                     Present Value of $1 at 10%                 Present value of ordinary annuity of $1 at 10%
1                                 0.90909                                           0.90909
2                                  0.82645                                           1.73554
3                                    0.75132                                        2.48685
4                                   0.68301                                            3.16986
5                                     0.62092                                           3.79079

Problem 1: What would be the net present value?

Reference no: EM132958156

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