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Question(s) / Instruction(s):

The Petty Company has analyzed an investment opportunity costing $270,000 and determined that the net present value is $1,420. Petty’s management estimated that the investment would generate cash inflows of $50,000 a year for eight years and used a discount rate of 10%. What was the salvage value associated with the investment opportunity?

Note: Present value tables are needed.

A             $4,670

B             $10,000

C             $6,960

D             $3,919

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