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Bryant Company has obtained the following data about a possible planned investment: Cost $155,000 Terminal salvage value in 10 years $5,000 Annual cash operating savings
Bryant Company has obtained the following data about a possible planned investment: Cost $155,000 Terminal salvage value in 10 years $5,000 Annual cash operating savings for 10 years (end of year) $25,000 Estimated useful life in years 10 Minimum desired rate of return 8% The company uses straight-line depreciation method. Ignore income taxes. The cash operating savings of $25,000 do not include depreciation expense. Required: A) Compute the net present value of the investment. B) Compute the payback period.
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