Golden Sands Distribution Company is considering the purchase of a new pallet wrapping machine at a cost of $55 000.The machine will result in increased cash flow for the company of $13 000 per annum for the next five years.What is the NPV of this project if the company use a discount rate of 12% per annum?
A)$46 862
B)-$8138
C)$8138
D)-$46 862
E)$10 000

Question

Quizplus · Accepted Answer

The NPV is calculated by discounting the future cash flows at the given rate and subtracting the initial investment. The NPV is negative, indicating the project may not be financially viable.

Golden Sands Distribution Company Is Considering the Purchase of a New