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Bryant Inc. is considering the purchase of some new equipment. The initial investment will be $270,000. The annual savings in cash operating costs are $50,000.
Bryant Inc. is considering the purchase of some new equipment. The initial investment will be $270,000. The annual savings in cash operating costs are $50,000. The estimated useful life of the equipment will be 8 years, at which point it will have a $10,000 terminal salvage value. The company uses the straight-line depreciation method. The company has a minimum desired rate of return of 10%. Required: (15 pts.) (1) Compute the Net Present Value of the investment. (2) Compute the Payback period. (3) Compute the Accounting Rate of Return. (4) Should Bryant Inc. purchase the equipment? Explain why
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