Calculate the net present value of the investment

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Reference no: EM13841468

Brass Knuckle Company wants to buy a new machine which will not increase its revenues, but that will reduce its costs by $10,000 per year. The machine will cost $60,000 and will have a useful life of nine years. At the end of the machine’s useful life, it will have no salvage value. Brass Knuckle wants an 11% rate of return. Ignoring the effects of taxes, calculate the net present value of the investment. Should Brass Knuckle make this investment?

Reference no: EM13841468

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