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A small industrial machine costs $124000 and is expected to earn annual net cash inflows as per the following table befo
Posted: Thu May 19, 2022 3:23 pm
by answerhappygod
- A Small Industrial Machine Costs 124000 And Is Expected To Earn Annual Net Cash Inflows As Per The Following Table Befo 1 (90.01 KiB) Viewed 82 times
A small industrial machine costs $124000 and is expected to earn annual net cash inflows as per the following table before it wears out and must be sold for an estimated $12400 at the end of its useful life. At the End of Yr Cash Inflows ($) 1 54600 2 49600 3 44600 4 39700 1. Calculate the NPV if the business sets their required rate of return at 11% (2 marks) 2. Advise management on the purchase of the machine. (1 mark) 3. List one advantage and one disadvantage of using the NPV method (3 marks – 2*1.5 mark each)