The Following Data Pertain to an Investment Proposal Ignoring Income Taxes, How Much Is the Net Present Value

question 12

Multiple Choice

The following data pertain to an investment proposal: $\begin{array}{lr}\text { Required investment } & \$ 75,000 \\\text { Annual cash savings } & \$ 18,000 \\\text { Projected life of investment } & 8 \text { years } \\\text { Projected salvage value } & \$ 4,000 \\\text { Required rate of return } & 16 \%\end{array}$ Ignoring income taxes, how much is the net present value of the proposed investment?

• A)$13,527
• B)$3,185
• C)$14,747
• D)$4,405

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