In the diagram, what is mAngleVSR?
2 answers:
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Answer:
Builtrite D should purchase the machine
Step-by-step explanation:
Cash outflow in year zero = $ 500,000 + $ 25,000 ( training cost ) + $ 30,000 ( Net working capital)
Cash outflow in year zero = $ 555,000
Terminal cash flow in year 10 = $ 150,000 + $ 30,000 ( NWC)
Terminal cash flow in year 10 = $ 180,000
Operating cash flow per year = [ Savings - expenses - depreciation ] X ( 1 - tax rate) + depreciation
Net present value =
The Net present value of purchasing the machine = $32,071.42
Builtrite D should purchase the machine