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Para Co. is reviewing the following data relating to an energy saving investment proposal: Cost...

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Finance

Para Co. is reviewing the following data relating to an energy saving investment proposal: Cost P50,000 (nondepreciable) Residual value at the end of 5 years 10,000 Present value of an annuity of 1 at 12% for 5 years 3.60 Present value of 1 due in 5 years at 12% 0.57 What would be the annual savings needed to make the investment realize a 12% yield assuming that Para will not realize the residual value at the end of year 5 and that the marginal tax rate is at 30%?

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