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Smith Company has an investment opportunity to purchase a new machine costing $75,000 that is...

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Accounting

Smith Company has an investment opportunity to purchase a new machine costing $75,000 that is expected to yield the following net cash flows over the next five years:

Year 1: $15,000

Year 2: $30,000

Year 3: $45,000

Year 4: $30,000

Year 5: $15,000

In year 5, Smith Company can get salvage value on the machine 5,000. Find the NPV of the investment at a discount rate of 10%. Should you accept this project? Why or why not?

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