(Answered) Boston company is contemplating the purchase of a new

Economics

Boston Company is contemplating the purchase of a new machine on which the following information has been gathered:

Cost of the machine $38,900
Annual cash inflows expected $10,000
Salvage value $ 5,000
Life of the machine 6 years

The company's discount rate is 16%, and the machine will be depreciated using the straight-line method. Given these data, the machine has a net present value of:

a. -$26,100.

b. -$23,900.

c. $0.

d. +$26,100.

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Macroeconomics, Economics

Category:- Macroeconomics
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