Lenardi Corporation Is Evaluating the Purchase of a New Machine

question 186

Multiple Choice

Lenardi Corporation is evaluating the purchase of a new machine that would have an initial cost of $110,000. This new machine would have a profitability index of 2.50. The company's discount rate is 15%. What is the present value of the net cash inflows of the new machine project?

• A)$16,500
• B)$275,000
• C)$44,000
• D)$733,333

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Definitions:

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