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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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