Determine the net present worth for Hollingsworth Machine Group

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Hollingsworth Machine Group needs a new precision grinding wheel. If 12% is the acceptable return for Hollingsworth, determine the net present worth of one of the best alternatives.

Cost =$80,000
Useful life = 5 years
Annual Cost=$12,000
Salvage Value=$10,000

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Solution Preview

Current Cash Flow=CFo=-80000

Cash Flow at the end of year 1=CF1=-12000

Cash Flow at the end of year 2=CF2=-12000

Cash Flow at ...

Solution Summary

Solution depicts the steps to estimate the present worth of the given example of Hollingsworth Machine Group.

$2.49