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The Board of Directors of JUMBO Ltd is considering a new investment proposal. It is...

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Accounting

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The Board of Directors of JUMBO Ltd is considering a new investment proposal. It is decided that the investment will be appraised using the NPV method of valuation. The investment involves the purchase of a new machine for 100,000 that will be paid immediately and increase net cash inflows by 30,000/ year for the next five years. At the end of the five-year period the machine will be sold for 10,000 scrap. This amount will be extra to the 30,000 net cash inflow in year 5 . The discount factors to be used are as follows: The Net Present Value of the above project is: a. None of the others b. 6,030 c. 6,030 d. 5,500 e. 5,500

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