Decision making-net present value


Thales Corporation wants to purchase machine for $60,000. It will depreciate the machine over the six-year period with no salvage value. The machine will generate pre-tax revenue of $20,000 yearly, the tax rate of Thales is 32%, and proper discount rate is 11%. The machine has uncertain life: it might run for five years (probability 50%), six years (probability 30%), or sevevn years (probability 20%). Must Thales buy the machine?

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Basic Statistics: Decision making-net present value
Reference No:- TGS018211

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