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What is the present value of increase in annual cash flows

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Grady Corp. is considering the purchase of a new piece of equipment. The equipment costs $50,400, and will have a salvage value of $5,060 after seven years. Using the new piece of equipment will increase Grady's annual cash flows by $6,070. Grady has a hurdle rate of 14%. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor from the PV tables.)

Problem 1: What is the present value of the increase in annual cash flows?

Reference no: EM132816971

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