Question
The following data pertain to an investment proposal (Ignore income taxes.): Cost of the investment $ 40,000 Annual cost savings $ 11,000 Estimated salvage value
The following data pertain to an investment proposal (Ignore income taxes.):
| Cost of the investment | $ | 40,000 | |
| Annual cost savings | $ | 11,000 | |
| Estimated salvage value | $ | 5,000 | |
| Life of the project | 5 | years | |
| Discount rate | 10 | % | |
Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided.
The net present value of the proposed investment is closest to: (Round your intermediate calculations and final answer to the nearest whole dollar amount.)
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Cornerstones of Managerial Accounting
Authors: Maryanne M. Mowen, Don Hanson, Dan L. Heitger, David McConomy, Jeffrey Pittman
2nd Canadian edition
978-0176721237, 978-0176530884
