Answer to Question #104023 in Finance for kayla

Question #104023
A manufacturing company is examining a proposed project to increase productivity. This project involves buying a machine that will have a cost of $32561 and will have a useful life of 7 years. At the end of the machine's useful life, the company expects to sell it for $2,500. The annual benefits are going to be $22,000 for the first year but will increase by $700 each year until the machine is no longer useful. The estimated operating and maintenance costs are going to be $12,600 for the first year but will increase by $1,000 each year after that. The analysis will use an interest rate of 8%. Calculate this project's net present value or net present worth.
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Expert's answer
2020-02-27T09:41:40-0500


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