Core Corp Is Considering the Purchase of a New Machine for for $85,000

question 47

Multiple Choice

Core Corp. is considering the purchase of a new machine for $85,000. The machine would generate an annual cash flow of $25,500 per year for six years. At the end of five years, the machine would have no salvage value. The company's cost of capital is 10 percent. The company uses straight-line depreciation with no mid-year convention. What is the net present value of the machine, assuming no taxes are paid? (Round your answers to two decimal places.)

• A)$0
• B)$11,670.50
• C)$15,180.70
• D)$(18,520.20)

Understand how technological innovations, government policies, and economic indicators influence market dynamics.

Identify the structures and cell types of the epidermis and their functions.

Understand the process of keratinization and its importance to skin health.

Recognize the skin's role in protection against environmental hazards.

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Definitions:

Lockbox System

A service offered by banks to companies for the collection of payments from customers, involving the customers sending their payments to a special post office box.

Net Present Value

A technique utilized in the process of capital budgeting to assess an investment's profitability by determining the difference between the present value of cash inflows and outflows.

Treasury Bills

Short-term government securities with maturation periods of one year or less, considered a safe and liquid investment option.

Opportunity Costs

The cost of missing out on the next best alternative when making a decision.