Aliara Corporation is considering purchasing one of two new machines. Estimates for each machine are...
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Accounting
Aliara Corporation is considering purchasing one of two new machines. Estimates for each machine are as follows:
Machine A
Machine B
Investment
$107,800
$155,700
Estimated life
8 years
8 years
Estimated annual cash inflows
$26,600
$40,000
Estimated annual cash outflows
$6,300
$9,800
Salvage value for each machine is estimated to be zero. Click here to view PV table. Calculate the net present value of each project assuming a 6% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124. Round present value answer to 0 decimal places, e.g. 125.)
Net Present Value
Machine A
$
Machine B
$
Answer & Explanation
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