The total initial investment (purchase, modification and investment in net operating working capital) will be $6,000.
The machine will result in operating cash flow of $2,400 per year for three years.
When the machine is sold at time period three the net sale price will be $1800. The firm will also recover the investment in net working capital of $609.
What is the net present value of the investment if the required return is 12%?
The net present value of the... View the full answer