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8. Johnson Company is considering purchase of a piece of equipment that will cost $10,000. The new equipment will save the company $3,000 per year
8. Johnson Company is considering purchase of a piece of equipment that will cost $10,000. The new equipment will save the company $3,000 per year for 5 years. A tune-up will be necessary in year 3, costing $500. The equipment will have a salvage value of $300 at the end of the five year period. The company's cost of capital is 8%. Compute the NPV of this investment. Is the investment acceptable
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