Your friend in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year to manufacture . However, once built, the machine will last forever and will require no maintenance. The machine can be built immediately, but it will cost to build. Your friend wants to know if he should invest the money to construct it. If the interest rate is per year, what should your friend do?
step 1) 200/ 0.06= 3,333.333333...
step 2) Answer: NPV 3,333- 2,000= 1,333
what should your friend do?
Answer: accept the machine because the NPV is equal to or greater than $0.
Your friend in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year to manufacture $200. However, once built, the machine will last forever and will require no maintenance. The machi
Your friend in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year to manufacture $800. However, once built, the machine will last forever and will require no maintenance. The machine can be built immediately, but it will cost $26,050 to build. Your friend wants to know if he should invest the money to construct it. If the interest rate is 3.0% per year, what should your friend do? What is your...