The document calculates the net present worth (NPW) of an investment in equipment that costs $625,000 to purchase and $125,000 to install. It factors in an annual cash inflow of $150,000 over 10 years discounted at 5% per year, as well as the full $875,000 cost discounted at 5% over 10 years. Performing the calculations, it determines the NPW is -$4,387.25, indicating the investment is not financially feasible.
The document calculates the net present worth (NPW) of an investment in equipment that costs $625,000 to purchase and $125,000 to install. It factors in an annual cash inflow of $150,000 over 10 years discounted at 5% per year, as well as the full $875,000 cost discounted at 5% over 10 years. Performing the calculations, it determines the NPW is -$4,387.25, indicating the investment is not financially feasible.
The document calculates the net present worth (NPW) of an investment in equipment that costs $625,000 to purchase and $125,000 to install. It factors in an annual cash inflow of $150,000 over 10 years discounted at 5% per year, as well as the full $875,000 cost discounted at 5% over 10 years. Performing the calculations, it determines the NPW is -$4,387.25, indicating the investment is not financially feasible.