What is the net present value

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Clean Air Systems buys a diagnostic piece of equipment for $270,000. The machine will be depreciated on a straight-line basis for 10 years with a salvage value of $50,000. The company expects the machine to be able to generate after-tax cash flows of $43,000 in each of the 10 years, and then it will sell the machine for $50,000 at the end of 10 years. The discount rate is 7%.

What is the Net Present Value? 

Cash Flows:

1 - 270,000

2 43,000

3 43,000

4 43,000

5 43,000

6 43,000

7 43,000

8 43,000

9 43,000

10 93,000

Rate (%): 7

NPV ($): ?

Reference no: EM132204008

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