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Larkspur, Inc. is considering purchasing equipment costing $72000 with a 6-year useful life. The equipment will provide annual cost savings of $18000 and will be

Larkspur, Inc. is considering purchasing equipment costing $72000 with a 6-year useful life. The equipment will provide annual cost savings of $18000 and will be depreciated straight-line over its useful life with no salvage value. Larkspur requires a 10% rate of return.

Present Value of an Annuity of 1 Period

8% : 4.623

9%: 4.486

10%: 4.355

11%: 4.231

12%: 4.111

15%: 3.784

What is the approximate net present value of this investment?

$36000

$8748

$6390

$4158

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