The Acu Punct Corporation is considering the purchase of a new machine with an - 3432

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  • Posted on: Fri 23 Mar, 2012
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Request Description

The Acu Punct Corporation is considering the purchase of a new machine with an initial outlay of $4500 and expected cash flows in years 1-4 of $2200 per year. The risk-adjusted discount rate for the firm is 12%, and the risk-free rate is 5%. Compute the net present value of this project.

a. 4300

b. 2181

c. 1899

d. 1535 

Solution Description

The Acu Punct Corporation is considering the purchase of a new machine with