Fabrel estimates the net cash flows that an extrusion machine will generate over its remaining useful life of three years, including the ultimate disposal flow: 220,000 in the first year, 121,000 in the second and 199,650 in the third. The cash flows are assumed to be received at the end of each year. The discount rate used (given) is 10 %. What is the value in use of the machine?
- Net cash flow, year 1
- 220,000
- Net cash flow, year 2
- 121,000
- Net cash flow, year 3 (including ultimate disposal)
- 199,650
- Discount rate (given)
- 10 %