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 ?
1 Answer