Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 10E: Roberts Company is considering an investment in equipment that is capable of producing more...
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A company is considering an investment that will require a cost outlay of $5,000 per year for the first five years and an extra $2000 at the beginning of Year 8. At the end of the project, the salvage value will be $15,000. The project will yield returns of $8500 at the end of each year from Year 4 to Year 10. There are no returns after Year 10. Providing a 21% rate of return , what is the NPV? If your answer is negative, be sure to place a (-) sign before the number.
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