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XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: Initial investment ................ ?
XYZ Company is considering the purchase of a new piece of equipment and has gathered the following information about the purchase: Initial investment ................ ? Annual cost savings ............... $20,000 Salvage value in 6 years .......... 30% of original cost of the equipment Repair in 4 years ................. $21,000 Cost of capital ................... 10% Life of project ................... 6 years The net present value of this investment was calculated to be $22,924. Calculate the salvage value for this piece of equipment. Ignore income tax effects.
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