GoldRush18
  • GoldRush18
Guy Wood Lumber Inc. is considering the purchase of a new lathe machine. The new lathe will cost $30 000, have an eight-year life, and create cost savings of $5 000 per year. The new lathe will require $700 of maintenance each year. Guy Wood Lumber Inc. uses a discount rate of 9 per cent. The annuity figure of 9 per cent for 8 years is 5.538 a. Compute the net cash flow per year. b. Compute the net present value of the lathe. c. Determine the payback period.
Finance
chestercat
  • chestercat
See more answers at brainly.com
At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat.

Get this expert

answer on brainly

SEE EXPERT ANSWER

Get your free account and access expert answers to this
and thousands of other questions

anonymous
  • anonymous
ok it is ready .
1 Attachment
anonymous
  • anonymous
maybe there were some little difference between the ways of calculating of PV,Due to floating point
GoldRush18
  • GoldRush18
ok thanks im going through it now

Looking for something else?

Not the answer you are looking for? Search for more explanations.

More answers

anonymous
  • anonymous
differences in result.
GoldRush18
  • GoldRush18
why are they raised to a power?
anonymous
  • anonymous
it is a very fundamental question . A dollar today is worth against the next year. Due to inflation and other reasons (risks). So with that equation, decrease the value of revenues of the following years to get the present value of them. \[PV = A \times (1 - (1 + r)^{n})/ r\] r = discount rate and n = years

Looking for something else?

Not the answer you are looking for? Search for more explanations.