Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / Butler Corporation is considering the purchase of new equipment costing $87,000

Butler Corporation is considering the purchase of new equipment costing $87,000

Accounting

Butler Corporation is considering the purchase of new equipment costing $87,000. The projected annual after-tax net income from the equipment is $3,100, after deducting $29,000 for depreciation. The revenue is to be received at the end of each year. The machine has a useful life of 3 years and no salvage value. Butler requires a 8% return on its investments. The present value of an annuity of $1 for different periods follows:

 

Periods8%10.925921.783332.577143.3121

 

What is the net present value of the machine?

Multiple Choice

  • $82,725.
  • $87,000.
  • $(4,275).
  • $9,300.
  • $74,736.

Option 1

Low Cost Option
Download this past answer in few clicks

3.95 USD

PURCHASE SOLUTION

Already member?


Option 2

Custom new solution created by our subject matter experts

GET A QUOTE