Vextra Corporation is considering the purchase of new equipment costing $35,000. The projected annual cash inflow is $11,000, to be received at the end of each year. The machine has a useful life of 4 years and no salvage value. Vextra requires a 12% return on its investments. The present value of an annuity of $1 for different periods follows: Periods 12% 1 0.8929 2 1.6901 3 2.4018 4 3.0373 What is the net present value of the machine

The net present value of the machine  = $ 1590

Explanation:

Solution

The first step is to compute the present value of annual cash inflows as shown below:

The present value of the inflow of cash = (Annual inflow of cash * PVIFA rate, period)

which is

= $11,000 * PVIFA 12%, 4

=  $11,000 * 3.0373

= $ 33,410

Note: the present value of  inflow of cash has been computed by multiplying Annual cash inflows and Cumulative factor of 12% and 4 years. Annual cash inflow is $11,000 and from the table of PVIFA rate for a 4 periods at 12% discount rate is 3.0373.

Next step is to compute the Net value as shown in the equation below:

Net present value = (present value of inflow of cash - Investment)

which is

=$ 33, 410 - $ 35,000

= $1590

The net present value is = $ 1590

Note: Net present value has been computed  be subtracting  investment from the present value of inflow of cash.

The opening investment is $35,000 and the present value of inflow of cash is $33,410. since the initial investment is more than the present value of cash inflows, the net present value is seen as negative.

d, conspicuous consumption is when you try to increase your wealth or social status (and in the case he's trying to create the perception of wealth considering he can't really afford it)

answer; i believe the correct answer is (a) motion for change of venue;