Question
41)(6 points)Bryant Company has obtained the following data about a possible planned investment: Cost$155,000 Terminal salvage value in 10 years$5,000 Annual cash operating savings for
41)(6 points)Bryant Company has obtained the following data about a possible planned investment:
Cost$155,000
Terminal salvage value in 10 years$5,000
Annual cash operating savings for 10 years (end of year)$25,000
Estimated useful life in years10
Minimum desired rate of return8%
The company uses straight-line depreciation method for financial reporting. Ignore income taxes. The cash operating savings of $25,000 do not include depreciation expense.
Required:
A) Compute the net present value of the investment.
____________________
B) Compute the payback period.
____________________
C) Compute the accounting rate of return using the initial required investment.
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