Crane Corp. did some further research and found one other possible machine that would produce the same type of production efficiencies. The information regarding Machine C is below: Machine COriginal cost $250,200Estimated life 10 yearsSalvage value $30,200Estimated annual cash inflows $45,100Estimated annual cash outflows $10,100Calculate the net present value and profitability index for Machine C. Use an 8% discount rate.

The net present value (NPV) method is used to compute the present value of all future cash flows…

Answered: Crane Corp. did some further research…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Crane Corp. did some further research and found one other possible machine that would produce the same type of production efficiencies. The information regarding Machine C is below:

		Machine C
Original cost		$250,200
Estimated life		10 years
Salvage value		$30,200
Estimated annual cash inflows		$45,100
Estimated annual cash outflows		$10,100

Calculate the net present value and profitability index for Machine C. Use an 8% discount rate.

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