Company A is considering the purchase of a new machine that would lower cash outflow. The cost of the machine is 30,000. The annual reduction in cash flows is:
If the cost of capital is 10%, calculate the following:
- the net present value of benefits (pvb)
- the net present value of costs (pvc)
- the net present value (npv)
- based on these analysis, should company A buy the machine?
1. The net present value of benefits (pvb) = ...
A buying scenario is considered.