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Q 12.42: Kensington, Inc. is considering an investment in new equipment that will produce equal annual cash flows of $70,000 for 6 years. The equipments
Q 12.42: Kensington, Inc. is considering an investment in new equipment that will produce equal annual cash flows of $70,000 for 6 years. The equipments net present value is a negative $63,830, its cost is $360,000, its useful life is 6 years, and its annual depreciation expense (no salvage value) is $60,000. What is the discount rate used by Kensington to evaluate this project?
Period 6 8% 4.623 Present Value of an Annuity of 1 9% 10% 11% 12% 4.486 4.355 4.231 4.111 15% 3.784Step by Step Solution
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