A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. - 4603

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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

A machine costs $1,000, has a three-year life, and has an estim