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Concose Park Department is considering a new capital investment. The cost of the machine ...

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Question

Accounting

Concose Park Department is considering a new capital investment. The cost of the machine
is $280,000. The annual cost savings if the new machine is acquired will be $165,000. The
machine will have a 3-year life and the terminal disposal value is expected to be $35,000.
There are no tax consequences related to this decision. If Concose Park Department has a
required rate of return of 14%, which of the following is closest to the present value of the
project?
O $190,880
$87,750
O $126,755
$103,130

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