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Which of the investments are acceptable

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The production department is proposing the purchase of an automatic insertion machine. It has identified 3 machines and have asked the accountant to analyze them to determine which of the proposals (if any) meet or exceed the company's policy of a minimum desired rate of return of 10% using the net present value method. Each of the assets has an estimated useful life of 10 years. The accountant has identified the following data:
?
                                               Machine A                 Machine B                Machine C
Present value of future cash              $305,000           $295,000                $300,000
flows computed using 10%
rate of return
Amount of initial investment                    $300,000            $300,000            $300,000

?Problem 1: Which of the investments are acceptable?

Option 1: Machines A & C

Option 1: Machines B & C

Option 1: Machine B only

Option 1: Machine A only

Reference no: EM132956655

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