A company wants to replace of $150,951 and is expected to generate free cash flow of $87,115 per year for the next 5 years. The company requires 13% return on capital investments of this sort and desires a 24-month pay back period. The existing machine would continue to function for the next five years if it is not replaced, but gradually become less useful. Free cash flows for the existing machine are forecasted to be $92,735 in year 1, $50,802 in year 2, $34,224 in year 3, $16,607 im year 4 and $6,488 in year 5. What is the net present value of this proposal? Enter your answer as a monetary amount rounded to four decimal places, but without the currency symbol. For example, if 180 1334 If you answer is less than zero, enter a negative value, like this: -90.1234

A company wants to replace of $150,951 and is expected to generate free cash flow of $87,115 per year for the next 5 years. The company requires 13% return on capital investments of this sort and desires a 24-month pay back period. The existing machine would continue to function for the next five years if it is not replaced, but gradually become less useful. Free cash flows for the existing machine are forecasted to be $92,735 in year 1, $50,802 in year 2, $34,224 in year 3, $16,607 im year 4 and $6,488 in year 5. What is the net present value of this proposal? Enter your answer as a monetary amount rounded to four decimal places, but without the currency symbol. For example, if 180 1334 If you answer is less than zero, enter a negative value, like this: -90.1234

Name: A company wants to replace a machine with a better version. The repla
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Description: A company wants to replace a machine with a better version. The replacement machine will require a net investmentof $150,951 and is expected to generate free cash flow of $87,115 per year for the next 5 years. The companyrequires 13% return on capit

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 4P

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