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Data for Van Guard Designs are:
Investment in new equipment $90 000
Net annual cash inflows 12 500
Salvage value of the new equipment 8 000
Life of the new equipment 10 years
Calculate the net present value of the machine assuming the cost of capital is 6% (ignore taxes and round answer to nearest whole dollar) .
Operating Cycle
The duration between the purchase of inventory by a business and the receipt of cash from accounts receivable, indicating the speed at which a company turns inventory into cash.
Equity Multiplier
A financial ratio that measures a company's leverage by comparing its total assets to its total equity.
Year 2
The second year in a specified timeframe, often used in financial and performance analysis.
Average Collection Period
A financial metric indicating the average number of days it takes for a company to receive payments owed by its customers.
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