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tanhound25Lv1
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.
A. What is the present value of the annual cost savings of54,000?
B. What is the net present value of the proposed project?
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.
A. What is the present value of the annual cost savings of54,000?
B. What is the net present value of the proposed project?
A. What is the present value of the annual cost savings of54,000?
B. What is the net present value of the proposed project?
Reid WolffLv2
28 Sep 2019