Baldock Inc.is considering the acquisition of a new machine that costs $420,000 and has a useful life of 5 years with no salvage value.The incremental net operating income and incremental net cash flows that would be produced by the machine are: Assume cash flows occur uniformly throughout a year except for the initial investment. If the discount rate is 12%,the net present value of the investment is closest to:
A)$330,000
B)$539,365
C)$119,365
D)$420,000

Question

Baldock Inc.is considering the acquisition of a new machine that costs $420,000 and has a useful life of 5 years with no salvage value.The incremental net operating income and incremental net cash flows that would be produced by the machine are:  Assume cash flows occur uniformly throughout a year except for the initial investment. If the discount rate is 12%,the net present value of the investment is closest to:
A)$330,000 
B)$539,365 
C)$119,365 
D)$420,000

Quizplus · Accepted Answer

The Answer of Baldock Inc.is considering the acquisition of a new machine that costs $420,000 and has a useful life of 5 years with no salvage value.The incremental net operating income and incremental net cash flows that would be produced by the machine are:  Assume cash flows occur uniformly throughout a year except for the initial investment. If the discount rate is 12%,the net present value of the investment is closest to:
A)$330,000 
B)$539,365 
C)$119,365 
D)$420,000