Use the Information Below to Answer the Following Question(s)

question 110

Multiple Choice

Use the information below to answer the following question(s) .Jupiter Ltd.wants to automate one of its production processes.The new equipment will cost $90,000.In addition, Jupiter will incur installation and testing costs of $5,000 and $4,500 respectively.The expected life of the equipment is 5 years and the salvage value of the equipment is estimated at $12,000.The annual cash savings are estimated at $29,000.The company uses straight-line depreciation and has a required rate of return of 9%.Ignore income taxes.
-What is the net present value for the investment Jupiter Ltd.is considering?

• A)$25,897.22
• B)$22,799.89
• C)$30,599.06
• D)$13,299.89
• E)$21,099.06

---

Definitions:

Mill Rate

The amount of tax payable per dollar of the assessed value of property, used in calculating property taxes.

Assessed

Evaluated or estimated, often in the context of determining the value for tax purposes.

Value

The monetary, material, or assessed worth of an asset, good, or service.

Fraction

A mathematical expression representing a part of a whole or a division of quantities.