FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The plant manager of Shenzhen Electronics Company is considering the purchase of new automated assembly equipment. The new equipment will cost $324,000. The manager believes that the new investment will result in direct labor savings of $81,000 per year for 10 years.

Present Value of an Annuity of $1 at Compound Interest
Year    6%    10%    12%    15%    20%
1    0.943    0.909    0.893    0.870    0.833
2    1.833    1.736    1.690    1.626    1.528
3    2.673    2.487    2.402    2.283    2.106
4    3.465    3.170    3.037    2.855    2.589
5    4.212    3.791    3.605    3.353    2.991
6    4.917    4.355    4.111    3.785    3.326
7    5.582    4.868    4.564    4.160    3.605
8    6.210    5.335    4.968    4.487    3.837
9    6.802    5.759    5.328    4.772    4.031
10    7.360    6.145    5.650    5.019    4.192

 

b.  What is the net present value, assuming a 10% rate of return? Use the table provided above. Round to the nearest whole dollar.

Net present value $       
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