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Janes, Inc

question 10

Essay

Janes, Inc., is considering the purchase of a machine that would cost $400,000 and would last for 5 years, at the end of which, the machine would have a salvage value of $67,000. The machine would reduce labor and other costs by $109,000 per year. Additional working capital of $4,000 would be needed immediately, all of which would be recovered at the end of 5 years. The company requires a minimum pretax return of 12% on all investment projects.
Required:
Determine the net present value of the project. Show your work!


Definitions:

Protein Synthesis

The cellular process of building proteins from amino acids, based on the instructions encoded in DNA and carried out by ribosomes, mRNA, and tRNA.

Codon

A sequence of three nucleotides in mRNA that specifies a particular amino acid or termination signal in the synthesis of proteins.

Amino Acid Coding

Amino acid coding involves the use of codons in mRNA to specify which amino acids will be added during protein synthesis.

MRNA

Messenger RNA, a single-stranded RNA molecule that is complementary to one of the DNA strands of a gene and is responsible for carrying genetic information from DNA to the ribosome where proteins are synthesized.

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