Hi i need assistance and explanation on how to Calculate the salvage value for this piece of equipment
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XYZ Company is considering the purchase of a new piece of equipment and has gathered
the following information about the purchase:
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Initial investment ................   ?
Annual cost savings ............... $20,000
Salvage value in 6 years .......... 20% of original cost of the equipment
Repair in 4 years ................. $11,000
Cost of capital ...................    10%
Life of project ...................   6 years
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If the new piece of equipment is purchased then the equipment currently being used
can be sold at the time of purchase of the new equipment for $7,000.
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The net present value of this investment was calculated to be -$28,730.
Calculate the salvage value for this piece of equipment. Do not use decimals in
your answer. Ignore income tax effects.
need to use the present value table factors for this question
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Status NEW
Posted 21 Apr 2017 01:04 AM
My Price 12.00
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