Turntec is considering replacing an automatic shuttle machin

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Turntec is considering replacing an automatic shuttle machine that has a book value of $2,000 and a $0 market value with a more efficient machine that will cost $24,000. The annual net cash flows from the new equipment are expected to be $6,000 for the next 6 years. What is the net present value of this project? Assume the firm's cost of capital is 12 percent and it's marginal tax rate is 40 percent.

a. $666
b. $1,466
c. - $134
d. $1,866

Reference no: EM13517867

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