What is the net present value of investment for saturn ltd

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Saturn Ltd. wants to automate one of its production processes. The new equipment will cost $180,000. In addition, Saturn will incur installation and testing costs of $5,000 and $8,500 respectively. The expected life of the equipment is 8 years and the salvage value of the equipment is estimated at $18,000. The annual cash savings are estimated at $32,000. The company's required rate of return is 14%. Ignore income taxes.

Problem 1: What is the net present value of this investment?

A ($25,246)

B $80,500

C ($38,746)

D ($11,746)

E ($45,056)

Reference no: EM132809975

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