Grant Ltd Invested in a Machine That Has a 3-Year

question 49

Multiple Choice

Grant Ltd invested in a machine that has a 3-year useful life. The company's discount rate is 12%, and the net present value of the investment is $(573) . Annual cost savings are: year 1 $3,000; year 2 $4,000; and year 3 $5,000. Determine the original cost of the machine. Ignore income taxes.

• A) $9,500
• B) $12,000
• C) $8,500
• D) $10,000

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Definitions:

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