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Miller and Jones Inc. is planning to invest $150,000 to purchase equipment. It has an estimated life of 10 years and no salvage value.
Miller and Jones Inc. is planning to invest $150,000 to purchase equipment. It has an estimated life of 10 years and no salvage value. The firm expects to save $27,000 every year by using the new equipment. The firm's cost of capital is 12 percent. The net present value (NPV) of the investment in the new equipment is (Present value of an annuity of $1 for 10 years at 12 percent is 5.6502.)
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