Vandezande Incorporated Is Considering the Acquisition of a New Machine

question 176

Multiple Choice

Vandezande Incorporated is considering the acquisition of a new machine that costs $370,000 and has a useful life of 5 years with no salvage value. The incremental net operating income and incremental net cash flows that would be produced by the machine are (Ignore income taxes.) : Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided.Assume cash flows occur uniformly throughout a year except for the initial investment.If the discount rate is 10%, the net present value of the investment is closest to:

• A) $370,000
• B) $457,479
• C) $234,000
• D) $87,479

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