(Answered) In an effort to reduce costs pontic manufacturing

Finance

In an effort to reduce costs, Pontic Manufacturing Corporation is considering an investment in equipment that will reduce defects. This equipment will cost $420,000, will have an estimated useful life of 10 years, and will have an estimated salvage value of $50,000 at the end of 10 years. Pontic"s discount rate is 22%. What amount of cost savings will this equipment have to generate per year in each of the 10 years in order for it to be an acceptable project?

A) $50,690 or more

B) $41,315 or more

C) $105,315 or more

D) $94,316 or more

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