QS 24-12 (Static) Net present value analysis with salvage value; no present value calculations LO P3 A company is considering two alternative machines with different net cash flows and salvage values. Present value amounts are calculated using Excel and the results follow. Potential Machine Investments Present value of net cash flows (excluding initial investment and salvage) Present value of net cash flow from salvage value Initial investment A $ 19,902 2,100 (20,000) a. Compute the net present value of each machine A and B. b. If the company can choose only one machine, which will it choose on the basis of net present value? B $ 20,800 552 (20,000)
QS 24-12 (Static) Net present value analysis with salvage value; no present value calculations LO P3 A company is considering two alternative machines with different net cash flows and salvage values. Present value amounts are calculated using Excel and the results follow. Potential Machine Investments Present value of net cash flows (excluding initial investment and salvage) Present value of net cash flow from salvage value Initial investment A $ 19,902 2,100 (20,000) a. Compute the net present value of each machine A and B. b. If the company can choose only one machine, which will it choose on the basis of net present value? B $ 20,800 552 (20,000)
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter26: Capital Investment Analysis
Section: Chapter Questions
Problem 4MAD
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