Question - Sunset Inc. is trying to determine if they should invest in a new machine that would be more efficient and would general an annual profit of $100,000 (after tax).
The following estimates are available:
Initial cost $279,800
Cost of capital 12%
Estimated life 4 years
Estimated residual value $ 0
Determine the net present value of the new machine (nearest answer if using a financial calculator or Excel).