Multiple Choice Question 57 Pina Colada Co. purchased some equipment 3 years ago. The company's...
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Accounting
Multiple Choice Question 57
Pina Colada Co. purchased some equipment 3 years ago. The company's required rate of return is 12%, and the net present value of the project was $(900). Annual cost savings were: $10000 for year 1; 8000 for year 2; and $6000 for year 3. The amount of the initial investment was
| Present Value | PV of an Annuity | |
| Year | of 1 at 12% | of 1 at 12% |
| 1 | 0.893 | 0.893 |
| 2 | 0.797 | 1.690 |
| 3 | 0.712 | 2.402 |
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