Pharoah Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $199,100 and has an
estimated useful life of 8 years with zero salvage value. Management estimates that the new bottling machine will provide net annual
cash flows of $35,200. Management also believes that the new bottling machine will save the company money because it is expected
to be more reliable than other machines, and thus will reduce downtime. Assume a discount rate of 10%. Click here to view PV table.
Calculate the net present value. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg
(45). For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round present value answer to 0 decimal places,
e.g. 125.)
Net present value ,$
How much would the reduction in downtime have to be worth in order for the project to be acceptable? (Round answer to 0 decimal
places, e.g. 125.)
$
Pharoah Bottling Corporation is considering the purchase of a new bottling machine.The machine would cost $199.1o0 and has an
estimated useful life of 8 years with zero salvage value.Management estimates that the new bottling machine will provide net annual
cash flows of $35,200.Management also believes that the new bottling machine will save the company money because it is expected
to be more reliable than other machines,and thus will reduce downtime.Assume a discount rate of 1o%.Click here to view PV table
Calculate the net present value.(If the net present value is negative,use either a negative sign preceding the number eg -45 or parentheses eg (45).For calculation purposes,use 5 decimal places as displayed in the factor table provided. Round present value answer to O decimal places e.g.125.)
Netpresentvalue
How much would the reduction in downtime have to be worth in order for the project to be acceptable?(Round answer to O decimal places,e.g.125.)
$