A machine that costs $1,500,000 has a 3-year life. It will generate after tax annual cash flows of...

Question

A machine that costs $1,500,000 has a 3-year life. It will generate after tax annual cash flows of $700,000 at the end of each year. It will
 be salvaged for $200,000 at the end of year 3. If your required rate of return for the project is 13%, what is the NPV of this investment
 ________.
 a.
 $291,417
 b.
 $400,000
 c.
 $600,000
 d.
 $338,395

Robert · Accepted Answer

Description 
A machine that costs $1,500,000 has a 3-year life. It will generate after tax annual cash flows of $700,000 at the end 
of each year. It will be salvaged for $200,000 at the end of year 3. If your required rate of return for the project is 
13%,

A machine that costs $1,500,000 has a 3-year life. It will generate after tax annual cash flows of $700,000 at the end of each year. It will be salvaged for $200,000 at the end of year 3. If your...

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