A machine costs $250,000 to purchase and will provide $60,000 a year in benefits. The company plans to use the machine for 12 years and then will sell the machine for scrap, receiving $15,000. The company interest rate is 10%. What is the net present worth to purchased?

= $163, 601; The machine shouldbe purchased

Explanation:

The question is to determine the net present worth of the machine

The net present worth can be calculated using the formula s follows

= The initial cost of the machine + (the yearly benefits / 1.1∧each year for 11 years) + (yearly benefit + Scrap value / 1.1∧12)

This formula can be applied as follows to calculate the present worth of cash flow

$250000 + ($60000/1.1) + ($60000/) + ($60000/) + ($60000/)+ ($60000/)+ ($60000/)+($60000/)+($60000/)+($60000/)+($60000/) + ($60000/) + ($60000  + 15,000/)

= $163, 601

Since the net Present worth is greater than 0, meaning it is not negative, then the machine can be purchased

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so, to answer your question 1.

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- courtney

answer; human resource management.(hrm);