Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. rightprice investors, inc., is considering the pur

RightPrice Investors, Inc., is considering the purchase of a $361,000 computer with an economic life...

50.1K

Verified Solution

Question

Finance

image

RightPrice Investors, Inc., is considering the purchase of a $361,000 computer with an economic life of five years. The computer will be fully depreciated over five years using the straight-line method. The market value of the computer will be $61,000 in five years. The computer will replace 5 office employees whose combined annual salaries are $106,000. The machine will also immediately lower the firm's required net working capital by $81,000. This amount of net working capital will need to be replaced once the machine is sold. The corporate tax rate is 35 percent. The appropriate discount rate is 11 percent. Calculate the NPV of this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV Is it worthwhile to buy the computer? O Yes

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Algebra
1.2K views

4 In November 26 students at Great Mills High School had contracted the flu Each...

Finance
1.2K views

Discuss the history of third-party reimbursement. Describe the most common reimbursement methodologies used in the past,...

Civil Engineering
1.2K views

A hazardous material spill on Interstate I-76 caused the eastbound traffic 20-minute delay. Traffic flow is...

Physics
1.2K views

Calculate the energy difference between the photopeak and the Compton edge in Co 60 spectra

General Management
1.2K views

Toby agreed to build a hog confinement facility for Pork USA. The contract between Toby and...

Geometry
1.2K views

3 Q2 Review AE is a straight angle and the ZCXD 4x mzDXE 2x mzCXB...

Geometry
1.2K views

3 5 The vector above has a magnitude of 1 18 O

Statistics
1.2K views

4 In the bottom of the ninth inning in a tie game the leadoff batter...

Algebra
1.2K views

What is the domain of f x x What is the domain of f x...

Accounting
1.2K views

Time Value of Money: Basics Using the equations and tables in Appendix 12A of this...

Accounting
1.2K views

USE EXCEL You are considering installing a new machine for your facility. The machine costs...

Accounting
1.2K views

The comparative financial statements of Blige Inc. are as follows. The market price of Blige...