Idlewood Production Company would like to purchase a production machine for $450,000.The machine is expected to have a life of four years,and a salvage value of $50,000.Annual maintenance costs will total $12,500.Annual savings are predicted to be $175,000.The company's required rate of return is 12 percent.
(1)Calculate the net present value of this investment (ignore income taxes).Round all calculations to the nearest dollar.
(2)Based on your answer in requirement 1,should Idlewood purchase the production machine?
Definitions:
Topic Sentence
A sentence that expresses the main idea of the paragraph in which it occurs, setting the tone for the paragraph's content.
Paragraph Unity
The coherence and consistency of ideas within a paragraph, ensuring that all sentences contribute to the paragraph's main idea.
Cause And Effect
A relationship where one event (the cause) leads to the outcome or consequence (the effect).
General Idea
A broad or basic conception of something that is not detailed but provides an overall understanding or summary.
Q12: Landscape Design Company incurred the following actual
Q13: On a common-size income statement,net income should
Q16: Conflicts rarely exist between the planning and
Q22: Which of the following statements is true
Q25: All of the following are ways that
Q35: The direct method of preparing a statement
Q35: Horizon Company produces a variety of boating
Q51: Product costs are always expensed in the
Q55: Which of the following best describes an
Q55: Allocated fixed costs are eliminated when a