An investment opportunity involves the purchase of a machine for $40,000. The machine will have a useful life of five years, after which time it will be scrapped. The machine will increase reported profit by $11,000 every year for five years. The company uses straight line depreciation. The required rate of return is 8% per annum. The investment will be funded by a loan for five years with an interest rate of 6% per annum.
Calculate the net present value of this investment.
Can I know how would you calculate this question?
Calculate the net present value of this investment.
Can I know how would you calculate this question?