Dexter Co. is considering a capital investment of $275,000 i…

Dexter Co. is considering a capital investment of $275,000 in new equipment. The equipment is expected to have a 5-year useful life with no salvage value. During the life of the investment, net annual cash flows are expected to be $80,000. Dexter’s minimum required rate of return is 10%. a) Using the present value tables below, what is the net present value of the investment? b) Should the investment be accepted or rejected?

Microsoft Company has a machine that affixes labels to bottl…

Microsoft Company has a machine that affixes labels to bottles. The machine has a book value of $80,000 and a remaining useful life of 3 years. If the company continues to use the current machine, it would require $10,000 in additional repair costs. A new, more efficient machine is available at a cost of $300,000 that will have a 3-year useful life with no salvage value. Additionally, the new machine will lower annual variable production costs from $520,000 to $410,000. If the current machine is sold, the company would receive a trade-in value of $6,000. What is the increase or (decrease) in net income that would result from purchasing the new machine?