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Southside Junk Yard needs to buy a car smasher. The machine would add the following net cash revenues to the business at the end of each year over...
Southside Junk Yard needs to buy a car smasher. The machine would add the following net cash revenues to the business at the end of each year over the next TWO years:
End of Year 1 = $40,000
End of Year 2 = $50,000
The initial cost of the machine is $100,000. At the end of TWO years, the machine's salvage value is estimated at $30,000 (in addition to the net cash revenues of $50,000 to be received at the end of Year 2). The required rate of return on the car smasher is 12 percent.
What is the NET PRESENT VALUE of the car smasher machine?
Do not calc with excel sheet please
