Why the machine will have no salvage value


The Gage Company purchased a machine which will be depreciated by the straight-line method over its estimated 6 year life. The machine will have no salvage value. It will generate cash inflows of $7,000 each year over the next 6 years. Gage Company's required rate of return is 14%. If the net present value of this investment is $12,016, the purchase price of the machine was?

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Accounting Basics: Why the machine will have no salvage value
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