The following information is available concerning the purchase of a new piece of equipment:
Initial investment ................ ? Annual cost savings ............... $50,000 Salvage value in 10 years ......... 10% of original cost of the equipment Cost of capital ................... 12% Life of project ................... 10 years
The net present value of this investment was calculated to be $16,365.
Calculate the initial investment for this piece of equipment. Do not use decimals in your answer. Ignore income tax effects.
