The management of California Corporation is considering the purchase of a new machine costing $400,000. The company's de

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The Management Of California Corporation Is Considering The Purchase Of A New Machine Costing 400 000 The Company S De 1 (13.97 KiB) Viewed 10 times

The management of California Corporation is considering the purchase of a new machine costing $400,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Year 1 2 3 4 5 Income from Operations $100,000 Ob. 145 Oc. 6.A Od. 0.70 40,000 20,000 10,000 10,000 Net Cash Blow $180,000 120,000 100,000 90,000 90,000 The present value index for this investment is Oa. 1.14