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Louisiana Metal Works, Inc. is contemplating the purchase of a new milling machine. The purchase...

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Finance

Louisiana Metal Works, Inc. is contemplating the purchase of a new milling machine. The purchase price of the new machine is $60000 and its annual operating cost is $2675.67. The machine has a life of seven years, and it is expected to generate $15000 in revenues in each year of its life.
Use annual discounting.
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NPV
Revenue
Cost
Annual CF
PV @ 8%
PV @ 10%
PV @ 12%
What is the present value of the seventh-year annual cash flow, if the discount rate is
8% per year? _______________
10% per year? _______________
12% per year? _______________
What is the net present value of this investment if the discount rate is
8% per year? _______________
10% per year? _______________
12% per year? _______________

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