the management of hence corporation is considering the purchase of a new machine cos 509126

The management of Hence Corporation is considering the purchase of a new machine costing $200,000. The company’s desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability in this situation:

	Income from	Net Cash
Year	Operations	Flow
1	$50,000	$90,000
2	30,000	60,000
3	10,000	50,000
4	5,000	45,000
5	5,000	45,000

The average rate of return for this investment is

the management of hence corporation is considering the purchase of a new machine cos 509126

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