Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question

Transcribed Image Text:O
O
O
O
O
$589,811
$612,784
$635,811
None of the above
$606,778

Transcribed Image Text:Johnson Wholesale Corporation has purchased a new piece of equipment for $644,000, with $46,000 of that total being costs for installation. After
discussions with its accounting firm the company plans to depreciate the installation costs straight-line over 5 years. The cost of capital is 7.5% and the
Tax Rate is 22%. Rounded to the nearest dollar, what is the present value of the cost of the equipment?
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