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Beryls food Tea currently rents a bonding machine for $52,000 per year, including all maintenance expenses. It is considerin
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Answer #1

NPV of renting the current Machine is -$226,800.75 (Note 1)

NPV of purchasing the current Machine is -$222,363.16 (Note 2)

NPV of Purchasing the advanced Machine is -$188,618.78 (Note 3)

| | Note 1: Calculation of NPV of renting the current Machine Particulars Rental Expenses (A) Less: Tax Benefit@ 35% (B=A*35%

Note 2: Calculation of NPV of the purchase of current Machine Particulars Initial Investment Purchase of machine (A) - 165000

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