Book & Bible Bookstore Desires to Buy a New Coding

question 42

Essay

Book & Bible Bookstore desires to buy a new coding machine to help control book inventories.The machine sells for $36 586 and requires working capital of $4000.Its estimated useful life is five years and will have a salvage value of $4000.Recovery of working capital will be $4000 at the end of its useful life.Annual cash savings from the purchase of the machine will be $10 000.
Required:
a.Compute the net present value at a 14% required rate of return.
b.Compute the internal rate of return.
c.Determine the discounted payback period of the investment.
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Definitions:

Observant Muslim

An individual who strictly adheres to the practices, rituals, and codes of conduct prescribed by Islam.

Religious Beliefs

Systems of faith or worship; the conviction and acceptance of certain truths concerning the existence of God, moral order, and the afterlife.

Modesty

A value or quality related to behaving and dressing in ways considered respectful and appropriate for a given culture or context.

Cultural Competence

The ability of individuals and organizations to effectively interact with people of different cultures and socio-economic backgrounds.