Answer:
($3,100)
Explanation:
Net cash flows each year = Projected annual after-tax net income + Depreciation
Net cash flows each year = $1,200 + $10,000
Net cash flows each year = $11,200 each year
Total value of inflows in 3 years = Net cash flows each year * Annuity factor of (10%,3 years)
Total value of inflows in 3 years = $11,200 * 2.4018
Total value of inflows in 3 years = $26,900
Net Present value = Present value of inflows - Cash outflow
Net Present value = $26,900 - $30,000
Net Present value = ($3,100)
So, tnet present value of the machine is ($3,100).
