(Present Value Tables Are Required

question 118

Multiple Choice

(Present value tables are required. ) Karpets Industries is investing in a new high-speed loom for weaving its rugs and carpets.The new loom will have a useful life of 7 years and cost $80,000.The loom's residual value is $5,000.Assume that Karpets requires a return of 10% and that the loom will create annual cost savings of $16,250.What is the net present value (NPV) of the new loom?

• A)$1,670
• B)($3,460)
• C)$81,670
• D)($895)

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