A company is considering the purchase of a piece of equipment that would cost $400,000 and would last for 10 years. At the end of 10 years, the equipment would have a salvage value of $95,000. The equipment would provide annual cost savings of $88,000. The company requires a minimum pretax return of 13% on all investment projects. (Ignore income taxes.)

Required:

Provide your Excel input and the final net present value amount you calculated. (If a variable is not used in the calculation, input a zero (0). Omit the "$" and "%" signs in your response.) Round your answer to the nearest dollar and use a minus sign for negative numbers.

Excel input:

Rate

%

Nper

PMT

$

PV

$

FV

$

Net Present Value (NPV)

$

Required:

Input the required variables and the computed internal rate of return. (If a variable is not used in the calculation, input a zero (0). Omit the "$" and "%" signs in your response.) Round your answer to one decimal place and use a minus sign for negative numbers.

Excel input:

Rate

%

Nper

PMT

$

PV

$

FV

$

Internal Rate of Return (IRR)

%