Oriole Manufacturing is considering the purchase of new computerized equipment. The machine costs $66000 and would generate $19360 in annual cost savings over its 5-year life. At the end of 5 years, the equipment would have a $4400 salvage value. Oriole's required rate of return is 12%.
Oriole Manufacturing is considering the purchase of new computerized equipment. The machine costs $66000 and would generate $19360 in annual cost savings over its 5-year life. At the end of 5 years, the equipment would have a $4400 salvage value. Oriole's required rate of return is 12%.
Chapter11: Capital Budgeting Decisions
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![Oriole Manufacturing is considering the purchase of new computerized equipment. The machine costs $66000 and would generate
$19360 in annual cost savings over its 5-year life. At the end of 5 years, the equipment would have a $4400 salvage value. Oriole's
required rate of return is 12%.
Click here to view the factor table.
Using the present value tables, the machine's net present value is (round to the nearest dollar)
O $466.
O $3789.
O $6286.
O $69789.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb7d4978a-587f-4fb0-b662-b1647e006431%2Fff853256-082c-471b-826a-60e993419c18%2F0g89rew_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Oriole Manufacturing is considering the purchase of new computerized equipment. The machine costs $66000 and would generate
$19360 in annual cost savings over its 5-year life. At the end of 5 years, the equipment would have a $4400 salvage value. Oriole's
required rate of return is 12%.
Click here to view the factor table.
Using the present value tables, the machine's net present value is (round to the nearest dollar)
O $466.
O $3789.
O $6286.
O $69789.
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