Southside Junk Yard needs to buy a car smasher
January 11th, 2018
Southside Junk Yard needs to buy a car smasher. The machine would add net cash revenues of $175,000 at the end of the first year and $200,000 at the end of the second year (it will only last two years). The initial cost of the machine is $350,000. At the end of two years, the salvage value of the car smasher is estimated to be $50,000. The required rate of return on the car smasher is 15%. What is the net present value of the car smasher machine?