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Allisa [31]
3 years ago
11

Poe Company is considering the purchase of new equipment costing $90,000. The projected net cash flows are $45,000 for the first

two years and $40,000 for years three and four. The revenue is to be received at the end of each year. The machine has a useful life of 4 years and no salvage value. Poe requires a 10% return on its investments. The present value of $1 and present value of an annuity of $1 for different periods is presented below. Compute the net present value of the machine.
Business
1 answer:
Ludmilka [50]3 years ago
4 0

Answer:

NPV = $45,472.30

Explanation:

<em>The NPV is the difference between the PV of cash inflows and the PV of cash outflows. A positive NPV implies a good investment decision and a negative figure implies the opposite.  </em>

<em>NPV of an investment:  </em>

NPV = PV of Cash inflows - PV of cash outflow  

PV of cash inflows = 45,000  ×1 .1^(-1) +  45,000 × 1.1^(-2) +  40,000 × 1.1^(-3) +  40,000 × 1.1^(-4)= 135,472.3038

Initial cost = 90,000

NPV = 135,472.3038  - 90,000 =$45,472.3038

NPV = $45,472.30

                             

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What were the economic changes that revolutionized manufacturing in the eighteenth century and led to the factory system?
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Answer:

The industrial revolution affected the whole global economy, social relations, and culture.

The industrial revolution changed how goods were manufactured, and it all started with the European accumulation of capital and the invention of the steam engine.

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7 0
3 years ago
You have recently won the super jackpot in the Washington State Lottery. On reading the fine print, you discover that you have t
icang [17]

Answer:

should choose option a

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option a)

annuity due, 31 payments of $180,000 per year, 6.25% discount rate

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option b)

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6 0
3 years ago
A new machine for harvesting corn will allow rows to be planted only fifteen inches apart, instead of the usual thirty inches. C
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3 years ago
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solniwko [45]

Answer:

$2.25

Explanation:

Please check the attached image for the full question used in answering this question

Breakeven sales is the quantity sold at which net income is equal to zero.

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$1,215,000 / ($80 - $35) = 27,000

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Variable cost would increase by  : $37.25 - $35 = 2.25

8 0
3 years ago
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