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28 Sep 2019
Stern Corporation is considering the purchase of a machine thatwould cost $270,000 and would last for 9 years. At the end of 9years, the machine would have a salvage value of $38,000. Byreducing labor and other operating costs, the machine would provideannual cost savings of $54,000. The company requires a minimumpretax return of 16% on all investment projects.
The present value of the annual cost savings of $54,000 is closestto:
$14,202
$946,093
$486,000
$248,778
The net present value of the proposed project is closest to:
$16,778
-$11,228
-$21,222
-$42,700
Stern Corporation is considering the purchase of a machine thatwould cost $270,000 and would last for 9 years. At the end of 9years, the machine would have a salvage value of $38,000. Byreducing labor and other operating costs, the machine would provideannual cost savings of $54,000. The company requires a minimumpretax return of 16% on all investment projects.
The present value of the annual cost savings of $54,000 is closestto:
$14,202
$946,093
$486,000
$248,778
The net present value of the proposed project is closest to:
$16,778
-$11,228
-$21,222
-$42,700
The present value of the annual cost savings of $54,000 is closestto:
$14,202
$946,093
$486,000
$248,778
The net present value of the proposed project is closest to:
$16,778
-$11,228
-$21,222
-$42,700
Lelia LubowitzLv2
28 Sep 2019
