Question
Grady Corp is considering the purchase of a new piece of equipment. The equipment costs $51,800, and will have a salvage value of $5,010 after
Grady Corp is considering the purchase of a new piece of equipment. The equipment costs $51,800, and will have a salvage value of $5,010 after nine years. Using the new piece of equipment will increase Gradys annual cash flows by $6,100. Grady has a hurdle rate of 8%. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) |
a. | What is the present value of the increase in annual cash flows? (Round "PV Factor" to 4 decimal places. Round your answer to 2 decimal places.)
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