$$\text { Reference: } 10 - 02$$ Oriental Company Has Gathered the Following Data on a Proposed

question 86

Multiple Choice

$$\text { Reference: } 10 - 02$$ Oriental Company has gathered the following data on a proposed investment project: $$\begin{array} { | l | l | } \hline \text { Investment in depreciable equipment } & \$ 200,000 \\\hline \text { Annual net cash flows } & \$ 50,000 \\\hline \text { Life of the equipment } & 10 \text { years } \\\hline \text { Salvage value } & \$ 20 \\\hline \text { Discount rate } & 10 \% \\\hline\end{array}$$ The company uses straight-line depreciation on all equipment.
-The net present value of this investment would be?

• A)$200,000.
• B)$77,200.
• C)$107,250.
• D)($14,350).

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