An investment of $75,000 in equipment that will reduce the time for machining self-locking fastenerswill save $20,000 per year. At an interest rate of 10% per year, the number of years required to recoverthe initial investment is closest to:(a) 6 years(b) 5 уears(c) 4 years(d) 3 years(e) None of the aboveabde

Investment = 75,000 Savings each year = 20,000 Interest Rate = 10% per year

Answered: An investment of $75,000 in equipment…

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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Considering an interest rate of 8%, that the cost of the equipment is $300,000 and you will replace the equipment after 7 years, what is the annual cost if the expected salvage value is $75,000?
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