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?
The net present value of the proposed investment is computed in the solution. Whether this project should be accepted or not is determined.