net present value of the proposed investment
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6. The following data pertain to an investment that is being considered by the management of Sublex Company:
Discount rate 10%
Life of the project 5 years
Cost of the investment $56,865
Annual cost savings 15,000
Estimated salvage value 3,000
What is the net present value of the proposed investment? Should the project be accepted? Why or why not?
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Solution Summary
The net present value of the proposed investment is computed in the solution. Whether this project should be accepted or not is determined.
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