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What is the net present value of this investment

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Reference no: EM133063013

Question - Victorian Charity Services, a not-for-profit institution not subject to income taxes, is considering the purchase of a new vehicle costing $42,000 to achieve cash savings of $10,000 per year in operating costs. The estimated useful life is 7 years, with no residual value. The minimum expected return is 14%.

Required -

a. What is the net present value of this investment?

b. What is the payback period for this investment?

c. What is the accrual accounting rate of return based on the initial investment?

Reference no: EM133063013

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