Samson Inc. is contemplating the purchase of a machine that will provide it with net after-tax cash savings of $100,000 per year for 8 years. Assuming a 10% discount rate, calculate the present value of the cash savings.
What will be an ideal response?
$533,493.
PVA = $100,000 × 5.33493 (Table 4; n = 8; i = 10%) = $533,493.
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