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MMLU / Skytop Co. a nonprofit entity is considering acquiring a machine for …

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question

Skytop Co. a nonprofit entity is considering acquiring a machine for 80000thatwillproduceuniformcashinflowsof80000 that will produce uniform cash inflows of 25000 for four years. Skytop evaluates capital projects using discounted cash flows at a cost of capital of 10% per year. Based upon the following table what action should Skytop take regarding acquisition of the machine and why? Future value of $1 for 4 years at 10% $1.464 Present value of $1 for 4 years at 10% $0.683 Future value of $1 ordinary annuity for 4 years at 10% $4.641 Present value of $1 ordinary annuity for 4 years at 10% $3.170 Acquire: Reason:
Plain-text mathematical notation (without MathML)
Skytop Co. a nonprofit entity is considering acquiring a machine for 80000thatwillproduceuniformcashinflowsof25000 for four years. Skytop evaluates capital projects using discounted cash flows at a cost of capital of 10% per year. Based upon the following table what action should Skytop take regarding acquisition of the machine and why? Future value of $1 for 4 years at 10% $1.464 Present value of $1 for 4 years at 10% $0.683 Future value of $1 ordinary annuity for 4 years at 10% $4.641 Present value of $1 ordinary annuity for 4 years at 10% $3.170 Acquire: Reason:
Original LaTeX notation
Skytop Co. a nonprofit entity is considering acquiring a machine for $80000 that will produce uniform cash inflows of $25000 for four years. Skytop evaluates capital projects using discounted cash flows at a cost of capital of 10% per year. Based upon the following table what action should Skytop take regarding acquisition of the machine and why? Future value of $1 for 4 years at 10% $1.464 Present value of $1 for 4 years at 10% $0.683 Future value of $1 ordinary annuity for 4 years at 10% $4.641 Present value of $1 ordinary annuity for 4 years at 10% $3.170 Acquire: Reason:

choices

  1. Yes Net cash flow is $20000
  2. Yes Net future value is $36025
  3. No Net present value is ($750)
  4. No Net present value is ($8750)

subject

professional_accounting

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