Mathematics · Financial Mathematics
A machine costs 500 and is expected to save 150 per year for 4 years. If the salvage value is 0 and the discount rate is 10%, is the NPV positive?
- 1Yes, NPV is 10.
- 2No, NPV is -15.
- 3No, NPV is -25.✓
- 4Yes, NPV is 25.
Correct answer
No, NPV is -25.
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