Annual cash savings from the purchase of the machine will, Ask an Expert

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Sam's Structures desires to buy a new crane and accessories to help move and install modular buildings. The machine sells for $75,000 and requires working capital of $10,000. Its estimated useful life is six years and it will have a salvage value of $17,560. Recovery of working capital will be $10,000 at the end of its useful life. Annual cash savings from the purchase of the machine will be $20,000.

Required:

a. Compute the net present value at a 12% required rate of return

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M982468

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