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. You will need to use the present value table factors

Present Value of a Lump-Sum Periods 3% 0.9709 0.9426 0.9151 0.8885 0.8626 0.8375 0.8131 0.7894 0.7664 0.7441 0.7014 0.6419 0.6232 0.6050 0.5874 0.5703 0.5537 0.5375 0.4920 0.4776 5% 0.9524 0.9070 0.8638 0.8227 0.7835 0.7462 0.7107 0.6768 0.6446 0.6139 0.5568 0.4810 0.4581 0.4363 0.4155 0.3957 0.3769 0.3589 0.3101 0.2953 Rate of interest per period in percent 8% 9% 10% 12% 14% 15% 16% 0.9259 0.9174 0.9091 0.8929 0.8772 0.8696 0.8621 0.8573 0.8417 0.8265 0.7972 0.7695 0.7561 0.7432 0.7938 0.7722 0.7513 0.7118 0.6750 0.6575 0.7350 0.7084 0.6830 0.6355 0.5921 0.5718 0.5520 0.6806 0.6499 0.6209 0.5674 0.5194 0.4972 0.4761 0.6312 0.5963 0.56450.50660.4556 0.4323 0.4104 0.5835 0.5470 0.5132 0.4523 0.3996 0.37590.3538 0.5403 0.5019 0.4665 0.4039 0.3506 0.3269 0.3050 0.5003 0.4604 0.3075 0.2843 0.2630 0.4630 0.4224 0.3855 0.3220 0.2697 0.2472 0.2267 0.3971 0.3555 0.3186 0.2567 0.2076 0.1869 0.1685 0.3152 0.2745 0.2394 0.1827 0.1401 0.1229 0.1079 0.2919 0.2519 0.2176 0.1631 0.1229 0.1069 0.0930 0.27030.2311 0.1978 0.1456 0.1078 0.0929 0.0802 0.2503 0.2120 0.1799 0.1300 0.0946 0.0808 0.0691 0.2317 0.1945 0.1635 0.1161 0.08290.07030.0596 0.2146 0.1784 0.1486 0.1037 0.0728 0.0611 0.0514 0.1987 0.1637 0.1351 0.0926 0.0638 0.0531 0.0443 0.1577 0.1264 0.1015 0.0659 0.0431 0.0349 0.0284 0.1460 0.1160 0.0923 0.0588 0.0378 0.0304 0.0245 20% 0.8333 0.6944 0.5787 0.4823 0.4019 0.3349 0.2791 0.2326 0.1938 0.1615 0.1122 0.0649 0.0541 0.0471 0.0376 0.0313 0.0261 0.0217 0.0126 0.0105 12 15 16 20 21 25 Present Value of an Annuity Periods 3% 0.9709 1.9135 2.8286 3.7171 4.5797 5.4172 6.2303 7.0197 7.7861 108.5302 12 9.9540 15 11.9379 16 | 12.5611 17 13.1661 18 | 13.7535 19 | 14.3238 20 14.8775 21 15.4150 25 17.4132 5% 0.9524 1.8594 2.7233 3.5460 4.3295 5.0757 5.7864 6.4632 7.1078 7.7217 8.8633 10.3797 10.8378 11.2741 11.6896 12.0853 12.4622 12.8212 14.0939 Rate of interest per period in percent 8% 9% 10% 12% 14% 15% 16% 20% 0.9259 0.9174 0.9091 0.8929 0.87720.8696 0.86210.8333 1.7833 1.7591 1.7355 1.6901 1.6467 1.5278 2.5771 2.5313 2.4869 2.4018 2.3216 2.2832 2.2459 2.1065 3.3121 3.2397 3.1699 3.0374 2.9137 2.8550 2.7982 2.5887 3.9927 3.8897 3.7908 3.6048 3.4331 3.3522 3.2743 2.9906 4.62294.48594.3553 4.1114 3.8887 3.7845 3.6847 3.3255 5.2064 5.0330 4.8684 4.5638 4.2883 4.1604 4.0386 3.6046 5.7466 5.5348 5.3349 4.9676 4.6389 4.48734.3436 3.8372 6.2469 5.9953 5.7590 5.3283 4.9464 4.7716 4.6065 4.0310 6.7100 6.4177 6.1446 5.6502 5.2161 5.0188 4.8332 4.1925 7.5361 7.1607 6.8137 6.1944 5.6603 5.4206 5.1971 4.4392 8.5595 8.0607 7.6061 6.8109 6.1422 5.8474 5.5755 4.6755 8.8514 8.3126 7.8237 6.9740 6.2651 5.9542 5.6685 4.7296 9.1216 8.5436 8.0215 7.1196 6.37296.0472 5.7487 4.7746 9.3719 8.7556 8.2014 7.2497 6.4674 6.1280 5.8178 4.8122 9.6036 8.9501 8.36497.3658 6.5504 6.1982 5.8775 4.8435 9.8182 9.1286 8.51357.4694 6.6231 6.25935.9288 4.8696 10.0168 9.2922 8.6487 7.5620 6.68706.3125 5.9731 4.8913 10.6748 9.8226 9.0770 7.84316.8729 6.4641 6.0971 4.9476