B240 Final Exam W2024 Question 12 of 13 Kingbird Corporation is considering buying a brand new machine and has gathered the following data: Investment Estimated life Estimated annual cash inflows $104,400 6 years $29,100 Estimated annual cash outflows $10,500 Salvage value for the machine is estimated to be zero. Click here to view the factor table. -/8 III Calculate the net present value of the machine assuming a 5% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg-45 r parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124. Round present value answer to O decimal places, e.g. 125.) Net Present Value $ Should the company buy the machine based on your results? SUPPORT

B240 Final Exam W2024 Question 12 of 13 Kingbird Corporation is considering buying a brand new machine and has gathered the following data: Investment Estimated life Estimated annual cash inflows $104,400 6 years $29,100 Estimated annual cash outflows $10,500 Salvage value for the machine is estimated to be zero. Click here to view the factor table. -/8 III Calculate the net present value of the machine assuming a 5% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg-45 r parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124. Round present value answer to O decimal places, e.g. 125.) Net Present Value $ Should the company buy the machine based on your results? SUPPORT

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter26: Real Options

Section: Chapter Questions

Problem 9SP

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