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Compute the net present value of a capital project

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Reference no: EM133126888

Question - Given the following data and a minimum return of 8% Ignore income taxes.

Old equipment

New equipment

Purchase price

$155 000

$125 000

Accumulated depreciation

7 200

0

Remaining useful life (years)

10

10

Current salvage value

54 000

0

Salvage value in 10 years

20 000

32 000

Annual operating costs

14 000

2 000

Required - Compute the net present value of a capital project to buy new equipment for replacing old equipment?

Reference no: EM133126888

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