Business, 21.05.2021 17:10 jaydenhoward

Caine Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost S183,399 and has an estimated useful life of 8 years with zero salvage value. Management estimates that the new bottling machine will provide net annual cash fiows of $30,000. Management also believes that the new bottling machine will save the company money because it is expected to be more reliable than other machines, and thus will reduce downtime. Assume a discount rate of 8%. Calculate the net present value.
How much would the reduction in downtime have to be worth in order for the project to be acceptable?

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Caine Bottling Corporation is considering the purchase of a new bottling machine. The machine would...