The City of Brandon is considering the purchase of new road repair equipment costing $40,000 to achieve cash savings of $8,000 per year in operating costs. The estimated useful life is 10 years, with no terminal value. The city's minimum expected return is 14%.
a)What is the net present value of this investment?
b)What is the internal rate of return?
c)What is the accounting rate of return based on the initial investment?
d)What is the payback period?

Question

Quizplus · Accepted Answer

The Answer of The City of Brandon is considering the purchase of new road repair equipment costing $40,000 to achieve cash savings of $8,000 per year in operating costs. The estimated useful life is 10 years, with no terminal value. The city's minimum expected return is 14%.
a)What is the net present value of this investment?
b)What is the internal rate of return?
c)What is the accounting rate of return based on the initial investment?
d)What is the payback period?

The City of Brandon Is Considering the Purchase of New