Mathematics, 25.05.2020 06:59 izzy123abc
Michaels, Inc., purchased a machine for $75,000. The machine has a useful life of five years and no salvage value. Straight-line depreciation is to be used. The machine is expected to generate cash flow from operations, net of income taxes, of $25,000 in each of the five years. Michaels' expected rate of return is 10%. Information on present value factors is as follows:
Period Present Value of $1 at 10% Present value of ordinary annuity of $1 at 10%
1 0.90909 0.90909
2 0.82645 1.73554
3 0.75132 2.48685
4 0.68301 3.16986
5 0.62092 3.79079
What would be the net present value?
Please provide step by step explanations in your answer.
Thanks!
Answers: 2
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Michaels, Inc., purchased a machine for $75,000. The machine has a useful life of five years and no...
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