Question
In: Finance
Market Top Investors, Inc., is considering the purchase of a $465,000 computer with an economic life...
|
Market Top Investors, Inc., is considering the purchase of a $465,000 computer with an economic life of six years. The computer will be fully depreciated over six years using the straight-line method, at which time it will be worth $126,000. The computer will replace two office employees whose combined annual salaries are $97,000. The machine will also immediately lower the firm’s required net working capital by $86,000. This amount of net working capital will need to be replaced once the machine is sold. The corporate tax rate is 21 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.) |
What is the NPV?
| Is it worthwhile to buy the computer? |
A. Yes
B. No
Solutions
jeff jeffy answered 2 years agoRelated Solutions
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