Feed the Hungry Foundation

question 25

Essay

Feed the Hungry Foundation
Feed the Hungry Foundation is a non-profit organization that has a cost of capital of 10 percent.The foundation is considering the replacement of a piece of equipment.The old machine has a book value of $3,000 and a remaining estimated life of 5 years with no salvage value at that time.The salvage value of the old machine is currently $1,500.The new equipment will cost $10,000.It has an estimated life of 5 years with no salvage value then.Annual cash operating costs are $4,000 for the old machine and $2,000 for the new machine.
Refer to Feed the Hungry Foundation.What is the present value of the operating cash outflows for the new machine?

---

Definitions:

King Philip's War

A conflict between Native American tribes led by the Wampanoag leader Metacomet, also known as King Philip, and English settlers in New England (1675-1676), marking one of the deadliest wars in American history.

Broadening of Freedom

The expansion of individual rights and liberties to more people, exemplified by social, political, and legal advancements over time.

New England

A region in the northeastern United States comprising six states: Maine, Vermont, New Hampshire, Massachusetts, Rhode Island, and Connecticut, known for its colonial past and as the birthplace of American democracy.

Slave Plantations

Large estates where enslaved African Americans were forced to work, primarily in the southern United States before the Civil War, mainly on cotton, tobacco, and sugar farms.