BEC Study Question

  • Creator
    Topic
  • September 21, 2015 at 5:54 pm #197089
    solrac69_96
    Member

    Hi Everyone,

    I am new here. I just started to study for the CPA, and I am suck on a question that I don’t understand the solution to and would like to see if there is anyone out there that can maybe provide a better explanation:

    Para Co. is reviewing the following data relating to an energy saving investment proposal:

    Cost $50,000

    Residual value at the end of 5 years 10,000

    Present value of an annuity of 1 at 12% for 5 years 3.60

    Present value of 1 due in 5 years at 12% 0.57

    What would be the annual savings needed to make the investment realize a 12% yield?

    a. $8,189

    b. $11,111

    c. $12,306

    d. $13,889

    The answer is C by the way.

    Thanks!

  • The topic ‘BEC Study Question’ is closed to new replies.