Lakeside Incorporated is considering replacing old production equipment with state$-$of$-$the$-$art technology that will allow production cost savings of $$10,000$ per month. The new equipment will have a five$-$year life and cost $$450,000,$ with an estimated salvage value of $$30,000.$ Lakeside$’$s cost of capital is $8\%.$ Table $6-4$ and Table $6-5.$

Required:

Calculate the present value ratio of the new production equipment.

Note: Use appropriate factor$($s$)$ from the tables provided. Round the PV factors to $4$ decimals. Round your answer to $2$ decimal places.

 

Answer rating: 100% (QA)

To calculate the present value ratio of the new production equipment we need to determine the presen... View the full answer