Butler corporation is considering the purchase of new equipment costing $36,000. the projected annual after-tax net income from the equipment is $1,400, after deducting $12,000 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 10% return on its investments. the present value of an annuity of $1 for different periods follows: periods 10% 1 0.9091 2 1.7355 3 2.4869 4 3.1699 what is the net present value of the machine?

Net Present Value = $33,324.46 - $36,000 = - $2,675.54

Explanation:

Cost of new project = $36,000

Cash inflow from the project = $1,400 + $12,000 = $13,400

Calculating net cash inflow we consider the cash inflow for this depreciation is added back as depreciation does not involve cash outflow

Life of the machine = 3 years

Return on investment = 10%

Present value interest factor cumulative 3 years = 2.4869

Present value of cash inflow = $13,400 2.4869 = $33,324.46

Present value of cash outflow = $36,000

Net Present Value = Cash Inflow - Cash outflow = $33,324.46 - $36,000 = - $2,675.54

Since, net present value is negative the project shall not be accepted.

answerjointly by the fed and by the behavior of individuals who hold money and of banks in which money is held;

answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.