A New Machine Tool Is Expected to Generate Receipts as Follows

question 19

Essay

A new machine tool is expected to generate receipts as follows: $5,000 in year one; $3,000 in year two, nothing in the next year, and $2,000 in the fourth year. At an interest rate of 6%, what is the net present value of these receipts? Is this a better net present value than $2,500 each year over four years? Explain.

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Definitions:

Output Devices

Hardware components that convey information from a computer or a computing system to the user, including monitors, printers, and speakers.

Store Information

The act of preserving or archiving data in a way that it can be retrieved and used in the future.

CD-R Technology

A digital optical disc storage format that allows writing data once and reading many times, primarily used for data storage and music playback.

Digital Source

Electronic or computational resources, platforms, or devices that provide information, data, or content accessible via digital means.