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GROUP 13
INVESTMENT $250,000
ANNUAL SAVING $72,000
PV OF $1 A YEARS ,5 YEARS, 15% 3.352
TOTAL PV OF SAVINGS $ 241,344
Net PV = $ 66,344
Decision : Purchase
Loan Interest 9%
Conclusion : When NPV have negative number, thus the proposal is rejected
(Not purchased)
2)
PART A PART D
Earning for each year $ 72,000 ( for each of $ 79,500 (Each year
5 years) for the first 3 years)
$ 60,750 (Each year
for the remaining 2
years)
TOTAL EARNING $ 360,000
Present Value $ 241,344 $246,441
Q&A