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  3. 22. a) a piece of equipment has a cost of $20,000.

22. a) A piece of equipment has a cost of $20,000. The equipment will provide...

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Accounting

22. a) A piece of equipment has a cost of $20,000. The equipment will provide cost savings of $3,500 each year for ten years, after which time it will have a salvage value of $2,500. If the company's discount rate is 12%, Calculate the net present value of the equipment. b) The Higgins Company has just purchased a piece of equipment at a cost of $120,000. This equipment will reduce operating costs by $40,000 each year for the next eight years. This equipment replaces old equipment that was sold for $8,000 cash. Calculate the payback period. (15)

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