Question
Monty, Inc. is considering purchasing equipment costing $90000 with a 6-year useful life. The equipment will provide annual cost savings of $22600 and will be
Monty, Inc. is considering purchasing equipment costing $90000 with a 6-year useful life. The equipment will provide annual cost savings of $22600 and will be depreciated straight-line over its useful life with no salvage value. Monty requires a 10% rate of return.
| Present Value of an Annuity of 1 | ||||||
| Period | 8% | 9% | 10% | 11% | 12% | 15% |
| 6 | 4.623 | 4.486 | 4.355 | 4.231 | 4.111 | 3.784 |
What is the approximate net present value of this investment?
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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
14th Global Edition
978-0273753872, 0273753878
