Solution-Determine what is the net present value of the

Determine what is the net present value of the machine

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Reference no: EM132593813

Butler Corporation is considering the purchase of new equipment costing $87,000. The projected annual after-tax net income from the equipment is $3,100, after deducting $29,000 for depreciation. The revenue is to be received at the end of each year. The machine has a useful life of 3 years and no salvage value. Butler requires a 8% return on its investments.

The present value of an annuity of $1 for different periods follows:

Periods 8% 10.925 921.783 332.577 143.3121

Question 1: What is the net present value of the machine?

Multiple Choice

Option 1: $82,725.

Option 2: $87,000.

Option 3: $(4,275).

Option 4: $9,300.

Option 5: $74,736.

Reference no: EM132593813

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Determine what is the net present value of the machine

Reference no: EM132593813

Reference no: EM132593813

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