Wilson Corp. is considering the purchase of a new piece of equipment. The cost savings from the
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Question:
Wilson Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $57,000. The equipment will have an initial cost of $611,000 and have an 8 year life. The salvage value of the equipment is estimated to be $43,000. If the hurdle rate is 12%, what is the approximate net present value?
a. Less than zero
b. $568,000
c. $43,000
d. $42,221
Related Book For
Mathematical Statistics with Applications in R
ISBN: 978-0124171138
2nd edition
Authors: Chris P. Tsokos, K.M. Ramachandran
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