A company is considering an investment that costs $785, 000 and has a salvage value in ten years of $137, 714, but the company is not sure how much net annual cash inflow will be provided by the investment. The company has a discount rate of 70%. Compute the net amount of annual cash flow required to break even.© BrainMass Inc. brainmass.com June 3, 2020, 8:07 pm ad1c9bdddf
Note: the abbreviations have the following meanings
PVIF= Present Value Interest Factor
PVIFA= Present Value Interest Factor for an Annuity
They can be read from tables or calculated using the following equations
PVIFA( n, r%)= =[1-1/(1+r%)^n]/r%
PVIF( n, ...
Computes the net amount of annual cash flow required to break even.