Freeman Corporation bought a piece of machinery. Selected data is presented below: Useful life 6 years Yearly net cash inflow $45,000 Salvage value - 0 - Internal rate of return 18% Cost of capital 15% Present value tables or a financial calculator are required. The initial cost of the machinery was
a. $157,392.
b. $174,992.
c. $165,812.
d. $170,303.
A
Use PV of Annuity for 6 years and 18%
$45,000 * 3.4976 = $157,392
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