ACME Corporation wants to purchase a piece of equipment for $100,000. It has a useful life of 5 years. There is no salvage value. The equipment will…

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ACME Corporation wants to purchase a piece of equipment for $100,000. It has a useful life of 5 years. There is no salvage value. The equipment will save $30,000 each year in cost savings. What is the present value of the equipment? The discount rate is 12%. no taxes in this situation. No working capital needed.

 

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