Machine B has an up-front cost of $50,000(CF0 = -50,000), and it produces after-tax cash inflows of $30,000 a year at the end of the next 3 years. After 3 years, Machine B can be replaced at a cost of $55,000 (paid at t = 3). The replacement machine will produce after-tax cash inflows of $32,000 a year for 3 years (inflows received at t = 4, 5, and 6).
The company's cost of capital is 10.5%. What is the net present value (on a 6-year extended basis) of the more profitable machine?
Recently Asked Questions
- Please refer to the attachment to answer this question. This question was created from examview-geo_ch3_test_review.
- Algebra questions please answer both questions Thank you
- Please refer to the attachment to answer this question. This question was created from AutecologyTakeHome _18 (1).doc. Additional comments: "see text above in