Biology Forums - Study Force

Rayburn Industries is evaluating the investment of $140,000 in a new packing machine that should provide annual cash operating inflows of $30,000 for 6 years. At the end of 6 years, the packing machine will be sold for $5,000. Rayburn's required rate of return is 8%.

Required:

a.	What is the machine's net present value?

b.	Based on net present value, should Rayburn purchase the new packing machine?

Why or Why not?

c.	List two qualitative items that Rayburn should consider in the decision to purchase

the new machine.

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