Poe Company is considering the purchase of new equipment costing $86,500. The projected annual cash...
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Poe Company is considering the purchase of new equipment costing $86,500. The projected annual cash inflows are $36,700, 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.
$(29,835).
$29,835.
$(16,668).
$16,668.
$47,786.
Present Value of $1 at 10% 0.9091 0.8264 0.7513 0.6830 Present Value of an Annuity of $1 at 10% 0.9091 1.7355 2.4869 3.1699 Periods
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