Question - The following present value factors are provided for use in this problem.
Periods
|
PV of 1 at 8%
|
PV of an annuity of 1 at 8%
|
1
|
.9259
|
.9259
|
2
|
.8573
|
1.7833
|
3
|
.7938
|
2.5771
|
4
|
.7350
|
3.3121
|
Cliff Co. wants to purchase a machine for $40k but needs to earn an 8% return. The expected year end net cash flows are $12k in each of the first 3 years and $16k in the fourth year. What is the machine's net present value?