Miles, Inc.is considering the purchase of a new machine for $600,000 that has an estimated useful life of 5 years and no salvage value.The machine will generate net annual cash flows of $105,000.It is believed that the new machine will reduce downtime because of its reliability.Assume the discount rate is 8%.In order to make the project acceptable, the reduction in downtime must be worth $\begin{array}{rrr}& \text { Present Value } & \text { PV of an Annuity } \
\text { Year } & \text { of } 1 \text { at } 8 \% & \text { of } 1 \text { at } 8 \%\\hline
1 & .926 & .926 \
2 & .857 & 1.783 \
3 & .794 & 2.577 \
4 & .735 & 3.312 \
5 & .681 & 3.993
\end{array}$
A)$23,958 per year.
B)$49,662 per year.
C)$18,264 per year.
D)$45,263 per year.

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The Answer of Miles, Inc.is considering the purchase of a new machine for $600,000 that has an estimated useful life of 5 years and no salvage value.The machine will generate net annual cash flows of $105,000.It is believed that the new machine will reduce downtime because of its reliability.Assume the discount rate is 8%.In order to make the project acceptable, the reduction in downtime must be worth $\begin{array}{rrr}& \text { Present Value } & \text { PV of an Annuity } \
\text { Year } & \text { of } 1 \text { at } 8 \% & \text { of } 1 \text { at } 8 \%\\hline
1 & .926 & .926 \
2 & .857 & 1.783 \
3 & .794 & 2.577 \
4 & .735 & 3.312 \
5 & .681 & 3.993
\end{array}$
A)$23,958 per year.
B)$49,662 per year.
C)$18,264 per year.
D)$45,263 per year.

Miles, Inc A)$23,958 Per Year