12 Butler Corporation is considering the purchase of new equipment costing $66,000. The projected annual income from the equipment is $2,400, after deducting $22,000 for depreciation. The revenue is to be received at the end of each year. The machine has a useful life of 3 years and no salvage value. Butler requires a 10% return on its investments. The present value of an annuity of $1 for different periods follows: Periods 10% 2.65 points 1 0.9091 2 1.7355 8 3 2.4869 02:12:17 4 3.1699 eBook What is the net present value of the machine (rounded to the nearest whole dollar)? Multiple Choice $54,712. О $(5,320). О $66,000. $60,680. $2,400.
12 Butler Corporation is considering the purchase of new equipment costing $66,000. The projected annual income from the equipment is $2,400, after deducting $22,000 for depreciation. The revenue is to be received at the end of each year. The machine has a useful life of 3 years and no salvage value. Butler requires a 10% return on its investments. The present value of an annuity of $1 for different periods follows: Periods 10% 2.65 points 1 0.9091 2 1.7355 8 3 2.4869 02:12:17 4 3.1699 eBook What is the net present value of the machine (rounded to the nearest whole dollar)? Multiple Choice $54,712. О $(5,320). О $66,000. $60,680. $2,400.
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
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Transcribed Image Text:12
Butler Corporation is considering the purchase of new equipment costing $66,000. The projected annual income from the equipment is $2,400, after deducting $22,000 for
depreciation. The revenue is to be received at the end of each year. The machine has a useful life of 3 years and no salvage value. Butler requires a 10% return on its investments. The
present value of an annuity of $1 for different periods follows:
Periods
10%
2.65
points
1
0.9091
2
1.7355
8
3
2.4869
02:12:17
4
3.1699
eBook
What is the net present value of the machine (rounded to the nearest whole dollar)?
Multiple Choice
$54,712.
О
$(5,320).
О
$66,000.
$60,680.
$2,400.
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