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What is the approximate net present value of the investment

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Blue Spruce, Inc. is considering purchasing equipment costing $84000 with a 6-year useful life. The equipment will provide annual cost savings of $22600 and will be depreciated straight-line over its useful life with no salvage value. Blue Spruce requires a 10% rate of return.

                           Present Value of an Annuity of 1

Period            8%          9%          10%         11%        12%         15%

                    6 4.623      4.486      4.355      4.231       4.111      3.784

Problem 1: What is the approximate net present value of this investment?

A. $51600

B. $14423

C. $11620

D. $17384

Reference no: EM132719296

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