Byron Corp is considering the purchase of a new piece of equipment. The cost sav

Question

Byron Corp is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow $103,000. The equipment will have an initial cost of $423,000 and have hurdle rate is 9%, what is the ? Ignore income taxes ent would result in an annual increase in cash flow of a 5 year life. The salvage value of the equipment is estimated to be $80,000. If the imate net present value? Ignore income taxes. Future Value of $1. Present Value of $1, Future Value Annuity of $ 1) (Use appropriate factor from the PV tables. Round your final answer to the neerest dollar a O $29,631 o $(22.361) O $183,000 O $103,000

Explanation / Answer

Here Cash flow from1-4 is $103000

In Year 5 cash inflow is 103000+80000= $183000

Put Cash inflow in The Excel in the range A1: A5

Use excel function

NPV(0.09,A1:A5)-423000

= $29631

OPTION A

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.