Animals, Inc. is considering a machine that will cost $18,000 and which can be sold after 3 years for $2,000. The machine will save Animals costs of $18,00 year for 3 years. The machine will be depreciated on a straight line basis over three years to a zero salvage value. Animals has a 20% tax rate and a 10% capital. What is the NPV of the machine? Multiple Choice $21997 $26.580 522797
Animals, Inc. is considering a machine that will cost $18,000 and which can be sold after 3 years for $2,000. The machine will save Animals costs of $18,00 year for 3 years. The machine will be depreciated on a straight line basis over three years to a zero salvage value. Animals has a 20% tax rate and a 10% capital. What is the NPV of the machine? Multiple Choice $21997 $26.580 522797
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 5P
Related questions
Question
![Animals, Inc. is considering a machine that will cost $18,000 and which can be sold after 3 years for $2,000. The machine will save Animals costs of $18,000 per
year for 3 years. The machine will be depreciated on a straight line basis over three years to a zero salvage value. Animals has a 20% tax rate and a 10% cost of
capital. What is the NPV of the machine?
Multiple Choice
$21997
$26.580
$22,797
$20796](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Feb8e17ef-c116-4db3-9205-3b2e768e022c%2F5d3a8b61-9cdf-4e2a-821c-d11700109847%2Fvdrx9cl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Animals, Inc. is considering a machine that will cost $18,000 and which can be sold after 3 years for $2,000. The machine will save Animals costs of $18,000 per
year for 3 years. The machine will be depreciated on a straight line basis over three years to a zero salvage value. Animals has a 20% tax rate and a 10% cost of
capital. What is the NPV of the machine?
Multiple Choice
$21997
$26.580
$22,797
$20796
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