Question: 1. You are considering a CNC machine. This machine will have an estimated service life of 10 years with a salvage value of 10% of the investment cost. Its annual net revenues are estimated to be $50,000. To expect a 20% rate of return on investment, what would be the maximum amount that you are willing to pay for the machine? (Ignore any tax consideration.)
$213,065
$209,624
$249,998
$276,860
2. What annual investment is required at 8% per year compounded annually to accumulate to $100,000 at the end of 20 years?
$1800
$2100
$2185
$5200