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Find the present value of an investment in equipment if it is expected to provide annual savings of $61,000 for 10 years and

PRESENT VALUE OF 1 (PRESENT VALUE OF A SINGLE SUM) in) IN- Present value of investment in equipment $ GA

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Answer #1

Annual Saving = $61,000
Salvage Value = $69,000
Time Period = 10 years
Interest Rate = 9%

Present Value = $61,000 * Present Value of an Ordinary Annuity of $1 (9%, 10) + $69,000 * Present Value of $1 (9%, 10)
Present Value = $61,000 * 6.41766 + $69,000 * 0.42241
Present Value = $420,624

Present value of investment in equipment is $420,624

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