Problem:
HiCo Company purchased a machine with an estimated useful life of seven years. The machine will generate cash inflows of $9,000 each year over the next seven years.
Requirement:
Question: If the machine has no salvage value at the end of seven years, and assuming the company's discount rate is 10%, what is the purchase price of the machine if the net present value of the investment is $17,000?
Note: Please explain comprehensively and give step by step solution.