A company is considering a project with a 3-year life producing the following costs cost and revenue:
N$ | |
Cost of machine | 100 000 |
Depreciation of machine (for 3 years) | 20 000 per annum |
Residual value of machine | 40 000 |
Annual cost of direct labour | 20 000 |
Annual charge for Foreman (10% apportionment) | 5 000 |
Annual costs of components required | 18 000 |
Annual net revenues from machine | 80 000 |
Cost of capital | 20% |
Calculate the net present value of the machine ?
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