Net present value of dropping the department

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Reference no: EM131067288

X Company is planning to drop a department that has shown a loss over the past few years. Its accountant estimates that the savings from dropping the department will be $18,700 a year for the next 6 years. The accountant also believes that the company will be able to immediately sell some equipment that was used in the department for $17,000. Assuming a discount rate of 5%, what is the net present value of dropping the department?

Reference no: EM131067288

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