Compute the machine net present value

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Question - Braxton Manufacturing is considering the purchase of new computerized equipment. The machine costs $85,000 and would generate $22,000 in annual cost savings over its 5-year life. At the end of 5 years, the equipment would have a $5,000 salvage value. Braxton's required rate of return is 12%. Compute the machine's net present value?

a. ($2,857)

b. ($5,694)

c. $79,306

d. $110,000

Reference no: EM132789054

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