# Net present Value

Florence is contemplating the purchase of a soda machine, which will be used to sell soft drinks to customers for $.75 each. The following estimates are available:

Initial outlay $3,500

Annual cash inflow $1,000

Cost of capital 10%

Estimated life 5 yrs

Estimated residual value 0

Determine the net present value of the soda machine.

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#### Solution Summary

The answer contains computation of Net present Value of the machine.

$2.19