Mathematics · Financial Mathematics
A machine has a carrying value of $60,000 and no alternative use. Incremental net cash inflows of $40,000 are expected from manufacturing a new product with this machine in the first year. The cost of capital is 10% per annum, and cash flows occur at the end of the year. What is the discounted net cash flow in the first year for the new product (to the nearest $100)?
- 1$36,400✓
- 2$36,200
- 3$36,500
- 4$36,100
Correct answer
$36,400
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