(Answered) Question - the following information is available

Accounting

Question - The following information is available concerning the purchase of a new piece of equipment:

Initial investment ................ ?

Annual cost savings ............... $50,000

Salvage value in 10 years ......... 10% of original cost of the equipment

Cost of capital ................... 12%

Life of project ................... 10 years

The net present value of this investment was calculated to be $16,365.

Calculate the initial investment for this piece of equipment. Do not use decimals in your answer. Ignore income tax effects.

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