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  3. a company is considering an investment (at time/ye

A company is considering an investment (at time/year =0 ) in a machine that produces...

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Accounting

image A company is considering an investment (at time/year =0 ) in a machine that produces large plastic boxes. The cost of the machine is 44,980 dollars with zero expected salvage value. Annual production (in units) during the 3 -year life of the machine is expected to be (starting at time = 1) 4,869,8,486, and 10,509. The sale price per unit of the plastic boxes is 14 dollars in year one, and the price is then expected to increase by 10% per year. Production costs per unit will be 6 dollars in year one, and then production costs will increase by 3% per year. Depreciation on the machine is 10,403 dollars per year, the tax rate is 40% and the minimum acceptable rate of return is 6% percent per year, compounded annually. Calculate the net present value of this investment. Assume all flows are at the end of each year. (note: round your answer to two decimal places; do not include spaces or dollar signs.)

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