1 Abusiness is considering the option of buying a piece of equipment that has a life of 5 years. The original cost of the equipment is RM50,000 and the interest rate is 10%. It is expected that the net cash flow is RM15,000 annually and the salvage value is RMS,000. Required a. What is the NPV? b. Recommend whether the investment is feasible.

1 Abusiness is considering the option of buying a piece of equipment that has a life of 5 years. The original cost of the equipment is RM50,000 and the interest rate is 10%. It is expected that the net cash flow is RM15,000 annually and the salvage value is RMS,000. Required a. What is the NPV? b. Recommend whether the investment is feasible.

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 3CMA

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