The net present value of machine is $5982
<h3>What is investment?</h3>
An investment is an asset or item acquired with the goal of generating income or appreciation.
As, 4th Year Cash Flow
= Salvage Value + Expected End Year Net Cash Flow
= $1,200 + $12,500
= $13,700
Year Cash flow ($) PVF at 8% Present value ($)
0 37,500 1.000 -36,300
1 12,500 0.9259 11573.75
2 12,500 0.8573 10716.25
3 12,500 0.7938 9922.5
4 13,700 0.7350 10069.5
Net value 5982
Hence, net present value of machine is $5982
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