What is the net present value for the investment jupiter ltd

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Problem 1: Jupiter Ltd. wants to automate one of its production processes. The new equipment will cost $90,000. In addition, Jupiter will incur installation and testing costs of $5,000 and $4,500 respectively. The expected life of the equipment is 5 years and the salvage value of the equipment is estimated at $12,000. The annual cash savings are estimated at $29,000. The company uses straight-line depreciation and has a required rate of return of 9%. Ignore income taxes. What is the accrual accounting rate of return for the investment Jupiter Ltd. is considering? What is the net present value for the investment Jupiter Ltd. is considering?

Reference no: EM132738900

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