Multiple Choice
Concose Park Department is considering a new capital investment. The cost of the machine is $280,000. The annual cost savings if the new machine is acquired will be $165,000. The machine will have a 3-year life and the terminal disposal value is expected to be $35,000. There are no tax consequences related to this decision. If Concose Park Department has a required rate of return of 14%, which of the following is closest to the present value of the project?
A) $190,880
B) $87,750
C) $126,755
D) $103,130
Correct Answer:
Verified
Correct Answer:
Verified
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