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Compute the maximum amount they will be willing to spend

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Question - Shirt Co. wants to purchase a new cutting machine for its sewing plant. The investment is expected to generate annual net cash inflows of $30,000, have a useful life of 8 years, and an estimated salvage value of $10,000. If Shirt Co. has a required rate of return of 12%, the maximum amount they will be willing to spend for this machine is:

A. $149,040

B. $153,080

C. $198,720

D. $300,000

Reference no: EM131969026

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