On January 1, 2021, NUBD Co. purchased a new machine for P100,000 with an estimated useful life of five years and no salvage value. For book and tax purposes, the machine will be depreciated using the straight-line method an it is expected to produce annual cash flow from operations, before income taxes, of P45,000. Assume that NUBD uses a time-adjusted rate of 12% and that its income tax rate will be 40% for all years. The net present value of the machine should be:(Use 3 decimal places for the PV factors) *

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On January 1, 2021, NUBD Co. purchased a new machine for P100,000 with an estimated
useful life of five years and no salvage value. For book and tax purposes, the machine will be
depreciated using the straight-line method an it is expected to produce annual cash flow from
operations, before income taxes, of P45,000. Assume that NUBD uses a time-adjusted rate of
12% and that its income tax rate will be 40% for all years. The net present value of the machine
should be:(Use 3 decimal places for the PV factors) *
Sample format: 11,111 or (11,111)
Transcribed Image Text:On January 1, 2021, NUBD Co. purchased a new machine for P100,000 with an estimated useful life of five years and no salvage value. For book and tax purposes, the machine will be depreciated using the straight-line method an it is expected to produce annual cash flow from operations, before income taxes, of P45,000. Assume that NUBD uses a time-adjusted rate of 12% and that its income tax rate will be 40% for all years. The net present value of the machine should be:(Use 3 decimal places for the PV factors) * Sample format: 11,111 or (11,111)
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