13

• $273000

• $118461

• $65100

• $(90576)

Scoth Corp is contemplating purchasing equipment that would increase sales revenues by $298,000 per year and cash operating expenses by $100,000 per year. The equipment would cost $600,000 and have a 5 year life with a $75,000 salvage value. The annual depreciation would be $105,000. Assuming the company's discount rate is 14%, the net present value of the investment is closest to the factors below for a 14% discount rate can be used to solve this problem): Periods Present Value of $1 0.877 0.769 0.675 0.592 0.519 Present Value of an Annuity of $1 0.877 1.647 2.322 2.914 3.433