Average rate of return? Net Present Value? and Present Value Index?

timer Asked: May 7th, 2015

Question description

The management of Wyoming Corporation is considering the purchase of a new machine $375,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the data in determining the acceptability:

year             income from operations           cash flow

1                     18,750                                   93,750

2                      same data all the way down




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