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    chabelo's Avatar
    chabelo Posts: 1, Reputation: 1
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    #1

    Nov 20, 2006, 12:15 AM
    Net Present Value
    Your company plans to acquire one of two assets. Asset A costs $162,500, and has expected annual cash savings of $37,500. Asset B costs $225,000, and has expected annual cash savings of $77,500. You'll use straight-line depreciation for both assets over their estimated useful lives of 5 years, after which both will have a salvage value of zero. Your minimum desired rate of return is 14%, and the present value factor is 3.4331.

    Ignoring income taxes, calculate the net present value for both assets.
    croketizame's Avatar
    croketizame Posts: 3, Reputation: 2
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    #2

    Aug 25, 2007, 03:16 PM
    Asset A: -33759.46
    Asset B: 41063.77

    This has been calculated in

    NPV online calculator
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