Pina Colada Co. purchased equipment 3 years ago. The company's required rate of return is 12%, and the net present value of the project was $(900). Annual cost savings were: $10000 for year 1: $8000 for year 2; and $6000 for year 3. The amount of the initial investment was Present Value PV of an Annuity Year of 1 at 12% of 1 at 12% 0.893 0.893 2 3 0.797 1.690 0.712 2.402 O $18678. O $20116. O $20478. O $18316. SU

Pina Colada Co. purchased equipment 3 years ago. The company's required rate of return is 12%, and the net present value of the project was $(900). Annual cost savings were: $10000 for year 1: $8000 for year 2; and $6000 for year 3. The amount of the initial investment was Present Value PV of an Annuity Year of 1 at 12% of 1 at 12% 0.893 0.893 2 3 0.797 1.690 0.712 2.402 O $18678. O $20116. O $20478. O $18316. SU

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 3MC: Electro Corporation bought a new machine and agreed to pay for it in equal annual installments of...

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