AB Co. purchased equipment 3 years ago. The company's required rate of return is 12%, and the net present value of the project was $(900). Annual cost savings were: $12000 for year 1; $10000 for year 2; and $8000 for year 3. The amount of the initial investment was Year 1 2 3 Present Value of 1 at 12% 0.893 0.797 0.712 $25282 $24920 $23482 $23120 PV of an Annuity of 1 at 12% 0.893 1.690 2.402

AB Co. purchased equipment 3 years ago. The company's required rate of return is 12%, and the net present value of the project was $(900). Annual cost savings were: $12000 for year 1;$10000 for year 2 ; and $8000 for year 3 . The amount of the initial investment was $25282 $24920 $23482 $23120 AB Co. purchased equipment 3 years ago. The company's required rate of return is 12%, and the net present value of the project was $(900). Annual cost savings were: $12000 for year 1;$10000 for year 2 ; and $8000 for year 3 . The amount of the initial investment was $25282 $24920 $23482 $23120