The management of Arkansas Corporation is considering the purchase of a new machine costing $490,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for Years 1 through 5 are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Income from Net Cash Year Operations Flow 1 $100,000 $180,000 40,000 120,000 3 40,000 100,000 4 10,000 90,000 5 10,000 120,000 The net present value for this investment is Oa. $5,200 Оь. s(16,170) Oc. $36,400 Od. S(126,800)

The management of Arkansas Corporation is considering the purchase of a new machine costing $490,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for Years 1 through 5 are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Income from Net Cash Year Operations Flow 1 $100,000 $180,000 40,000 120,000 3 40,000 100,000 4 10,000 90,000 5 10,000 120,000 The net present value for this investment is Oa. $5,200 Оь. s(16,170) Oc. $36,400 Od. S(126,800)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 18EB: Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the...

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