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Pitt Productions is considering the purchase of a new movie camera, which will be used for major motion pictures

Accounting

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Pitt Productions is considering the purchase of a new movie camera, which will be used for major motion pictures. The new camera will cost $30,000, have an eight-year life, and create cost savings of $5,000 per year. The new camera will require $700 of maintenance each year. Pitt Productions uses a discount rate of 9 percent.

Present value tables or a financial calculator are required.

1. 1. Compute the net present value of the new camer
   2. Determine the payback period.