Asked by Erick Varela on Apr 30, 2024
Verified
The present value of the annual cost savings of $78,000 is closest to:
A) $763,064
B) $177,027
C) $546,000
D) $367,536
Present Value
The current worth of a future sum of money or stream of cash flows given a specified rate of return.
Annual Cost Savings
The reduction in total expenses achieved during a fiscal year, often as a result of process improvements or budget adjustments.
- Understand the impact of yearly cost savings on the Net Present Value (NPV) of projects.
Verified Answer
ZK
Zybrea KnightMay 03, 2024
Final Answer :
D
Explanation :
Present value = Cash flow × PV Factor
= $78,000 × 4.712 = $367,536
= $78,000 × 4.712 = $367,536
Learning Objectives
- Understand the impact of yearly cost savings on the Net Present Value (NPV) of projects.
Related questions
A Company Evaluating Projects When There Is a Resource Constraint ...
The Projected Cash Flows for Two Mutually Exclusive Projects Are ...
Use the Following Information for the Next Three Questions: Nelson ...
PEI Corp's Management Has Determined That Two Independent Projects Have ...
Majestic Theaters Is Considering Investing in Some New Projection Equipment ...