Question
The Matisse Co. is contemplating investing in equipment that will automate their manufacturing facilty. The following information relates to purchasing the equipment: Initial cost
The Matisse Co. is contemplating investing in equipment that will automate their manufacturing facilty. The following information relates to purchasing the equipment: Initial cost of the equipment Life of the investment Annual cost savings Estimated salvage value received at the end of 5 years Discount Rate Factor - Present value of a $1 at the end of 5 years using 10% Factor Present value of an annuity for 5 years using 10% Required: Compute the net present value of the investment. a) $3,355 b) $621 O c) $0 d) ($3,430) $18,955 5 years $5,000 $1,000 10% .621 3.791
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