Rymer, inc. is considering a new assembler, which costs $180,000 installed,

Rymer, inc. is considering a new assembler, which costs $180,000 installed, and has a depreciable life of 5 years. The expected annual after-tax cash flows for the assembler are $60,000 in each of the 5 years and nothing thereafter. Calculate the net present value (NPV) of the assembler if the required rate of return is 14%. Round to the nearest ten dollars.
a. $25,200
b. $25,980
c. $51,960
d. $120,000

 

Solution