Newport Corporation is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net cash flow of $210,000. The equipment will have an initial cost of $890,000 and a 6-year useful life with no salvage value. If the company's cost of capital is 9%, what is the net present value? (Euture Value of $1 Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1.) Note: Use the appropriate factor from the PV tables. Multiple Choice $890,000 $296,667

Newport Corporation is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net cash flow of $210,000. The equipment will have an initial cost of $890,000 and a 6-year useful life with no salvage value. If the company's cost of capital is 9%, what is the net present value? (Euture Value of $1 Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1.) Note: Use the appropriate factor from the PV tables. Multiple Choice $890,000 $296,667

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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Question

Multiple Choice
о $890,000
$296,667
$942,039
$52,039
Д

Newport Corporation is considering the purchase of a new piece of equipment. The cost savings from the equipment would
result in an annual increase in net cash flow of $210,000. The equipment will have an initial cost of $890,000 and a 6-year useful
life with no salvage value. If the company's cost of capital is 9%, what is the net present value? (Future Value of $1
Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1.)
Note: Use the appropriate factor from the PV tables.
Multiple Choice
$890,000
$296,667

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