Question: Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $327,000 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $1,770,000. The cost of the machine will decline by $110,000 per year until it reaches $1,220,000, where it will remain. If your required return is 13 percent, calculate the NPV today. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
NPV $
If your required return is 13 percent, calculate the NPV for the following years. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Negative amounts should be indicated by a minus sign.)
NPV
Year 1 $
Year 2 $
Year 3 $
Year 4 $
Year 5 $
Year 6 $