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Aid Company is considering an investment in the project below: Project 1 Cost RM10,000 Annual cash operating savings (end of year) RM3,000 Terminal salvage RM2,000
Aid Company is considering an investment in the project below: Project 1 Cost RM10,000 Annual cash operating savings (end of year) RM3,000 Terminal salvage RM2,000 Useful life in years Required rate of return 10% Present value of one for 5 periods at 10% 0.6209 Present value of ordinary annuity of one for 5 periods at 10% 3.7908 Ignoring taxes, what is the lowest level of annual cash operating savings that will result in a positive net present value? A) RM2,310 B) RM2,638 C) RM3,002 D) RM3,120
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