Compute the net present value

The United Way is considering purchasing a new machine with a cost of $9,000, no salvage value, and a useful life of five years. The machine is expected to generate $2,850 in cash inflows during each year of the machine’s five-year life. Assuming the United Way’s hurdle rate is 14 percent, what is the maximum price the United Way should pay for this machine? Why?

Compute the net present value of the machine. Should the United Way acquire the machine? Why?

Don't use plagiarized sources. Get Your Custom Essay on
Compute the net present value
Just from $13/Page
Order Essay

Gerard, a not-for-profit entity, is considering the acquisition of a baseball winder that costs $56,200. The baseball winder has an expected life of 10 years and is expected to reduce production costs by $9,000 a year. Gerard’s hurdle rate is 12 percent.

What is the net present value of this project? Should Gerard undertake this investment? Why?

Place Order
Grab A 14% Discount on This Paper
Pages (550 words)
Approximate price: -
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Try it now!

Grab A 14% Discount on This Paper

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.