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Author Question: A company is considering a project that will require a cost outlay of $30 000 per year for three ... (Read 288 times)

bobbie

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Question 1

Replacing old office equipment at an immediate cost of $3000 and $4000 four years from now will result in savings of $400 semi-annually for ten years. Should the old equipment be replaced
a) at 8% compounded annually?
b) at 12% compounded annually?

Question 2

A company is considering a project that will require a cost outlay of $30 000 per year for three years. At the end of the project, the company expects to salvage the physical assets for $50 000. The project is estimated to yield net returns of $60 000 in Year 4, $40 000 in Year 5, and $15 000 for each of the following five years. Alternative investments are available yielding a rate of return of 14.5%. Compute the net present value of the project.


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Marked as best answer by bobbie on Jun 7, 2019

Liamb2179

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bobbie

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Reply 2 on: Jun 7, 2019
Thanks for the timely response, appreciate it


deja

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Reply 3 on: Yesterday
:D TYSM

 

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