Question 5 of 8 Blossom Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $187,700 and has an estimated useful life of 8 years with zero salvage value. Management estimates that the new bottling machine will provide net annual cash flows of $33,000. Management also believes that the new bottling machine will save the company money because it is expected to be more reliable than other machines, and thus will reduce downtime. Assume a discount rate of 10%. Click here to view PV table. Net present value $ 0/4 Calculate the net present value. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round present value answer to O decimal places, e.g. 125.) How much would the reduction in downtime have to be worth in order for the project to be acceptable? (Round answer to O decimal places, e.g. 125.) $ : eTextbook and Media
Question 5 of 8 Blossom Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $187,700 and has an estimated useful life of 8 years with zero salvage value. Management estimates that the new bottling machine will provide net annual cash flows of $33,000. Management also believes that the new bottling machine will save the company money because it is expected to be more reliable than other machines, and thus will reduce downtime. Assume a discount rate of 10%. Click here to view PV table. Net present value $ 0/4 Calculate the net present value. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round present value answer to O decimal places, e.g. 125.) How much would the reduction in downtime have to be worth in order for the project to be acceptable? (Round answer to O decimal places, e.g. 125.) $ : eTextbook and Media
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter12: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 10P: Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6...
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Heres the link for the pv table: https://education.wiley.com/content/Kimmel_Survey_Of_Accounting_2e/media/simulations/hidden_appE_tables/bappE_Tables.pdf.
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Question 5 of 8
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Net present value $
>
Blossom Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $187,700 and has an
estimated useful life of 8 years with zero salvage value. Management estimates that the new bottling machine will provide net annual
cash flows of $33,000. Management also believes that the new bottling machine will save the company money because it is expected
to be more reliable than other machines, and thus will reduce downtime. Assume a discount rate of 10%. Click here to view PV table.
$
0/4
Calculate the net present value. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg
(45). For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round present value answer to O decimal places,
e.g. 125.)
How much would the reduction in downtime have to be worth in order for the project to be acceptable? (Round answer to O decimal
places, e.g. 125.)
eTextbook and Media
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