Jacob manages a cloth manufacturing firm. He is deciding whether or not to invest in new machinery. The machinery costs $45,000 today and is expected to increase cash flows in the first year by $25,000 and in the second year by $30,000. The firm's accrued fixed costs are $2800. If the interest rate (cost of capital) is 15% then what is the net present value of the investment? 26.09 1840.09 2826.09 -576.56

Jacob manages a cloth manufacturing firm. He is deciding whether or not to invest in new machinery. The machinery costs $45,000 today and is expected to increase cash flows in the first year by $25,000 and in the second year by $30,000. The firm's accrued fixed costs are $2800. If the interest rate (cost of capital) is 15% then what is the net present value of the investment? 26.09 1840.09 2826.09 -576.56

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 12P

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Jacob manages a cloth manufacturing firm. He is deciding whether or not to invest In new machinery, The machinery costs $45,000 today and is expected to Increase cash lows in the first year by $25,000 and in the second year by $30,000. The firm's accrued fixed costs are $2800. If the interest rate (cost of capital) is 15% then whal is the net present value of the investment? 26.09 O 1840.09 2826.09 -576.56
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