A and b company puchase a machine the cost of capital is 12, Ask an Expert

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A and B COMPANY puchase a machine .the cost of capital is 12% .the cost ofd the machine is $35,000 and is expected to provide additional net cash flows of $5000 per year .the machine will last for 15 years .calculate the NPV and IRR. (B) The machine are willing to offer a permanent service contract for an annual fee of $500 .this will keep the machine new always for ever. the net cash flows will be reduced to $4500 per year .calculate npv and irr for the purchase accompained by service contract.

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Financial Management, Finance

Category:- Financial Management
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