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A piece of new equipment will cost $70,000. The equipment will provide a cost savings of $15,000 per year for ten years, after which it
A piece of new equipment will cost $70,000. The equipment will provide a cost savings of $15,000 per year for ten years, after which it will have a $3,000 salvage value. If the required rate of return is 14%, the equipment's net present value is: (Ignore income taxes.) a $8,240 b $23,888 c $(8,240) d $9,050 If the internal rate of return is used as the discount rate in computing net present value, the net present value will be: a zero. b negative. c unknown. d positive. The internal rate of return for a project is the discount rate that makes the net present value of the project equal to zero. True False
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