Poe Company is consldering the purchase of new equlpment costing $84,000. The projected net cash...
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Poe Company is consldering the purchase of new equlpment costing $84,000. The projected net cash flows are $39.000 for the first two years and $34,000 for years three and four. The revenue is to be recelved at the end of each year. The machine has a useful life of 4 years and no salvage value. Poe requlres a 10% returm on its Investments. The present value of $1 and present value of an annulty of $1 for dlifferent perlods Is presented below. Compute the net present value of the machine. Present Value of $1 at 1e% e9891 .8264 e.7513 8.6838 Present value of an Annuity of $1 at 18% 0.9091 1.7355 2.4869 3.1699 Periods 4
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