Keisha Company is considering the following investment:
Estimated capital investment $300,000
Estimated useful life 3 years
Estimated disposal value in 3 years $10,000
Estimated annual savings in cash operating costs(end of year) $130,000
Minimum desired rate of return 12%
Present value of ordinary annuity of one, 3 periods at 12% 2.4018
Present value of one, 3 periods at 12% 0.7118
Assume straight-line depreciation is used. Ignore income taxes. The net present value of the investment is ________.
A) $12,234
B) $19,352
C) $22,234
D) $100,000
B
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Indicate whether the statement is true or false
A bond issue floated by a U.S. company in dollars in London, Luxembourg, and Switzerland by a syndication of bonds is an example of a ________
A) global bond B) domestic bond C) Eurobond D) foreign bond