Asked by
jamal kamara
on Dec 17, 2024
Verified
The management of Penfold Corporation is considering the purchase of a machine that would cost $410,000, would last for 7 years, and would have no salvage value. The machine would reduce labor and other costs by $67,000 per year. The company requires a minimum pretax return of 7% on all investment projects.Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the proposed project is closest to (Ignore income taxes.) : (Round your intermediate calculations and final answer to the nearest whole dollar amount.)
A) $(48,937)
B) $(8,937)
C) $(73,857)
D) $(24,017)
Pretax Return
The income an investor or business earns before any taxes are deducted.
Net Present Value
A financial measurement that calculates the value of a project or investment by discounting the expected future cash flows to their present value using a specific discount rate.
- Deploy discount factor tables in the analysis of investment strategies.
- Absorb the core concept and mathematical execution of Net Present Value (NPV).
Verified Answer
MA
Learning Objectives
- Deploy discount factor tables in the analysis of investment strategies.
- Absorb the core concept and mathematical execution of Net Present Value (NPV).
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