Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. rightprice investors, inc., is considering the pur

RightPrice Investors, Inc., is considering the purchase of a $361,000 computer with an economic life...

50.1K

Verified Solution

Question

Finance

image

RightPrice Investors, Inc., is considering the purchase of a $361,000 computer with an economic life of five years. The computer will be fully depreciated over five years using the straight-line method. The market value of the computer will be $61,000 in five years. The computer will replace 5 office employees whose combined annual salaries are $106,000. The machine will also immediately lower the firm's required net working capital by $81,000. This amount of net working capital will need to be replaced once the machine is sold. The corporate tax rate is 35 percent. The appropriate discount rate is 11 percent. Calculate the NPV of this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV Is it worthwhile to buy the computer? O Yes

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Q1: If the theoretical yield of a reaction is 24.8 g and the actual yield is...

Chemistry
Q

Humans have little or no sensitivity to polarized light, and no sensitivity at all to ultraviolet...

Physics
Q

Often times, the special education teacher and general education teacher have opinions on when a student...

Psychology
Q

Why are tangible assets depreciated? Briefly described two or three depreciation methods and how they work.

Accounting
Q

Which of the following is descriptive of deuterostomes?spiral and determinate cleavage, blastopore develops second and...

Biology
Q

2 A metallic rod of mass per unit length 0 5 kg m is lying...

Physics
Q

A rock is thrown vertically upward from the surface of an airless planet. It reaches...

Basic Math
Q

IRAC Scenario Jack calls FTD flowers and the following conversation occurs with Jill from...

Accounting
Q

Fill in the missing data for items a and b based on the following information:...

Accounting
Q

Glorious, Inc. had after-tax income of $25,000 and 10,000 shares were outstanding. The owners were...

Finance
Q

A 10-year bond that pays interest semiannually has a 10% coupon and a 4% quoted...

Finance
Q

Under IFRS, which of the following would be considered a provision? Select one: a. Accounts...

Accounting