The following information is available concerning a potential investment project

Question

The following information is available concerning a potential investment project: Salvage value in 12 years 9% The net present value of this investment was calculated to be $6,274. Calculate the amount of the annual cost savings associated with this investment. Do not use decimals in your answer You will need to use the time value of money table factors posted in can vas to answer this question. To access these factors, click modules and then scroll to week 7. Click on the link labeled present & future value table factors. No credit will be awarded for this question using a means other than these table factors to answer this question.

Explanation / Answer

-167000+x/1.09+x/1.09^2....x/1.09^12+4000/1.09^12=6274

-167000+x*7.160725+4000*0.355535=6274

=>x=(6274-0.355535*4000+167000)/7.160725=23999.23

So, annual cost savings=$23999.23

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.