A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. - 4479

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UoPExpert

UoPExpert

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  • Posted on: Wed 28 Mar, 2012
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Request Description

A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)

a.     $490 

b.     $570 

c.     $900 

d.     -$150

Solution Description