Question

g You are interested in buying a vending machine for $4,000 and placing it at a friend's business. If the present value of all future expected cash inflows (net of costs) from this vending machine is $4,500, what is the net present value of this purchase to you

Answer 1

Answer:

a. Positive $500

Explanation:

Options are "a. Positive $500 b. Negative $500 c. $4,500 d, Not enough information to answer"

Net present value (NPV) = Present value of cash inflows - initial investment

Net present value (NPV) = $4,500 - $4,000

Net present value (NPV) = $500