Trenton Inc. is considering an equipment purchase that has a cost of $15,000. The equipment is expected to have a salvage value of $2,000 at the end of three years. In addition, the equipment is expected to generate cash flows over the next three years as follows: If Trenton's cost of capital is equal to 14 percent, the net present value of the equipment is: (ignore income taxes)

Question

Trenton Inc. is considering an equipment purchase that has a cost of $15,000. The equipment is expected to have a salvage value of $2,000 at the end of three years. In addition, the equipment is expected to generate cash flows over the next three years as follows:  If Trenton's cost of capital is equal to 14 percent, the net present value of the equipment is: (ignore income taxes)

Quizplus · Accepted Answer

The Answer of Trenton Inc. is considering an equipment purchase that has a cost of $15,000. The equipment is expected to have a salvage value of $2,000 at the end of three years. In addition, the equipment is expected to generate cash flows over the next three years as follows:  If Trenton's cost of capital is equal to 14 percent, the net present value of the equipment is: (ignore income taxes)