Replacing old equipment at an immediate cost of $130,000 and an additional outlay of $20,000...
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Finance
Replacing old equipment at an immediate cost of $130,000 and an additional outlay of $20,000 three years from now will result in savings of $32,000 per year for 6 years. The required rate of return is 8% compounded annually. Compute the net present value and determine if the investment should be accepted or rejected according to the net present value criterion.
The net present value of the project is $ ?
Should the proposal be accepted or rejected?
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