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What minimum annual savings in transportation costs needed

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Question - The Cook County Authority is considering the purchase of a small plane to transport government officials. It is hoped that the plane will save money on travel costs for government employees. Assume the county requires a 8 percent rate of return.

Using the present value tables in Exhibits 26-3 and 26-4, If the plane's cost is $306,840 and it can likely be sold in six years for $100,000, what minimum annual savings in transportation costs is needed in order to make the plane a good investment?

Reference no: EM132497198

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