Homework Answers
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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