Cost of the investment$ 32,000 Annual cost savings $ 9,000 Estimated salvage value$ 3,000 Life of the project5yearsDiscount rate10% Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the proposed investment is closest to: (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Multiple Choice $2,119 $3,982 $1,863 $20,000 The following data pertain to an investment proposal (Ignore income taxes.):Cost of the investmentAnnual cost savingsEstimated salvage valueLife of the projectDiscount rateClick here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.Multiple ChoiceThe net present value of the proposed investment is closest to: (Round your intermediate calculations and final answer to the nearest whole dollar amount.)OOO$2,119$3,982$ 32,000$ 9,000$ 3,000$1.8635 years10%$20,000 The following data pertain to an investment proposal (Ignore income taxes.):Cost of the investmentAnnual cost savingsEstimated salvage valueLife of the projectDiscount rateClick here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.Multiple ChoiceThe net present value of the proposed investment is closest to: (Round your intermediate calculations and final answer to the nearest whole dollar amount.)OOO$2,119$3,982$ 32,000$ 9,000$ 3,000$1.8635 years10%$20,000

Answered: Cost of the investment $ 32,000…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Cost of the investment	$ 32,000
Annual cost savings	$ 9,000
Estimated salvage value	$ 3,000
Life of the project	5	years
Discount rate	10%

Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.

The net present value of the proposed investment is closest to: (Round your intermediate calculations and final answer to the nearest whole dollar amount.)

Multiple Choice

$2,119
$3,982
$1,863
$20,000

The following data pertain to an investment proposal (Ignore income taxes.):
Cost of the investment
Annual cost savings
Estimated salvage value
Life of the project
Discount rate
Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.
Multiple Choice
The net present value of the proposed investment is closest to: (Round your intermediate calculations and final answer to the nearest whole dollar amount.)
O
O
O
$2,119
$3,982
$ 32,000
$ 9,000
$ 3,000
$1.863
5 years
10%
$20,000

Expert Solution

Step 1

NET PRESENT VALUE

Net Present Value is one of the Important Capital Budgeting Techniques.

Net present value is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Net Present Value is Computed :—

NPV = Present Value of Cash Inflow - Initial Investment

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