The Following Data Pertain to an Investment Proposal What Is the Net Present Value of the Proposed Investment

question 13

Multiple Choice

The following data pertain to an investment proposal: $\begin{array} { l r } \text { Cost of the Investment } & \$ 20,000 \\\text { Annual Cost Savings } & \$ 5,000 \\\text { Estimated Salvage Value } & \$ 1,000 \\\text { Life of the Project } & 8 \text { years } \\\text { Discount Rate } & 16 \%\end{array}$ What is the net present value of the proposed investment? (Ignore income taxes in this problem.)

• A) $1,720.
• B) $2,025.
• C) $2,154.
• D) $6,064.

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