Question

Calculate the NPV of a machine that is purchased for $5,000, sold at the end of year 4 for $2,500, and produces the following cash flows: - Year 1: $700 - Year 2: $800 - Year 3: $900 - Year 4: $1,000. Assuming that the appropriate discount rate is 6%, what is the NPV? A.) -$99.64. B.) $99.64. C.) -$2,079.87. D.) $2,079.87.

Name: calculate the npv of a machine that is purchased for 5000 sold at the end of year 4 for 2500 and produces the following cash flows year 1 700 year 2 800 year 3 900 year 4 1000 assuming that 02354
Uploaded: 2023-07-25T03:38:35-08:00
Duration: 4 min 8 s
Channel: Akash M
Description: calculate the npv of a machine that is purchased for 5000 sold at the end of year 4 for 2500 and produces the following cash flows year 1 700 year 2 800 year 3 900 year 4 1000 assuming that 02354

          Calculate the NPV of a machine that is purchased for $5,000, sold at the end of year 4 for $2,500, and produces the following cash flows: - Year 1: $700 - Year 2: $800 - Year 3: $900 - Year 4: $1,000. Assuming that the appropriate discount rate is 6%, what is the NPV?
A.) -$99.64.
B.) $99.64.
C.) -$2,079.87.
D.) $2,079.87.

Added by Michael J.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Akash M

07/25/2023

Step 1

Year 1: PV = 700 / (1 + 0.06)^1 = 660.38 Year 2: PV = 800 / (1 + 0.06)^2 = 723.68 Year 3: PV = 900 / (1 + 0.06)^3 = 772.20 Year 4: PV = 1,000 / (1 + 0.06)^4 = 822.71 Show more…

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Calculate the NPV of a machine that is purchased for $5,000, sold at the end of year 4 for $2,500, and produces the following cash flows: - Year 1: $700 - Year 2: $800 - Year 3: $900 - Year 4: $1,000. Assuming that the appropriate discount rate is 6%, what is the NPV? A.) -$99.64. B.) $99.64. C.) -$2,079.87. D.) $2,079.87.