Answer:
The net present value of the machine if the required rate of return is 13.5% is $447,292
Explanation:
Year Cash Flows PV Factor at 13.5% Net Present Value
0 ($1,875,000) 1 ($1,875,000)
1 $650,000 0.881057269 $572,687.22
2 $650,000 0.776261911 $504,570.24
3 $650,000 0.683931199 $444,555.28
4 $650,000 0.602582554 $391,678.66
5 $650,000 0.530909739 $345,091.33
5 $120,000 0.530909739 $63,709.17
Net Present Value $447,292
therefore, The net present value of the machine if the required rate of return is 13.5% is $447,292
