Quiz 12 question 21 what is the net present value for the snack machines? This Q

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Quiz 12 question 21

what is the net present value for the snack machines?

This Question: 1 pt 21 or 26 (21 complete) This Quiz: 26 pts pos The Janus Vending Machine Company is looking to expand its business by adding a new line of vending machines. The management team is considering expanding into either soda machines or snack machines. Following is the relevant financial data relating to the decision (For Soda Machines, the present value for this scenario is 0.792 and the present value of annuity for this scenario is 3.465 For Snack Machines, the present value for this scenario is 0.351 and the present value of annuity for this scenario is 4 639) Soda Machines Snack Machines $72.000 $25 000 Investment Useful life (years) Estimated annual net cash inflows for useful life Residual value Depreciation method Required rate of return $30,000 $20,000 $21,000 $12.000 Straight - line Straight-in 6% 14% OA. $101631 B. S76631 O C. $(47,790) O D. $58.000 Click to select your answer

Explanation / Answer

Present value of annual cash flows 97419 =21000*4.639 Present value of salvage value 4212 =12000*0.351 Less: Investment -25000 Net present value 76631 Option B is correct

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