Mills Corp. is considering two mutually exclusive machines. Machine A requires an up-front expenditure at t = 0 of $510,000, has an expected life of 2 years, and will generate positive after-tax cash flows of $390,000 per year (all cash flows are realized at the end of the year) for 2 years. At the end of 2 years the machine will have zero salvage value, but every 2 years the company can purchase a replacement machine with the same cost and identical cash inflows.
Alternatively, it can choose Machine B, which requires an expenditure of $1.2 million at t = 0, has an expected life of 4 years, and will generate positive after-tax cash flows of $430,000 per year (all cash flows are realized at year-end). At the end of 4 years, Machine B will have an after-tax salvage value of $100,000.
The cost of capital is 11%. What is the NPV (on an extended 4-year life) of the better machine?
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$197,438
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$199,925
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$283,552
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$286,026
Pupil assessment; B, moving penlight directly in front of pupil.
The 1993 “Rain Machine”over the North-Central U.S
The Upper Troposphere: The Polar Front and Jet Streams
Occluded front
ECG machine.
A promissory note for $600.OO dated January 15, 2017. requires an interest payment of $120 00 ...