Multiple Choice Question 106

Splish Brothers, Inc. is considering purchasing equipment costing $30000 with a 6-year useful life. The equipment will provide annual cost savings of $10600 and will be depreciated straight-line over its useful life with no salvage value. Splish Brothers 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?

$33600

$17552

$14848

$16163