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Haworth Company is considering the purchase of a labor-saving piece of equipment with the following information: Purchase cost of equipment $432,000 Annual cost savings $90,000
Haworth Company is considering the purchase of a labor-saving piece of equipment with the following information:
Purchase cost of equipment $432,000
Annual cost savings $90,000
Terminal salvage value 0
Useful life of equipment 12 years
Required rate of return 10%
What is the net present value of the equipment? Should Haworth purchase the quipment?
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