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    Break even

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    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.

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    https://brainmass.com/business/accounting/break-even-124655

    Solution Preview

    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, ...

    Solution Summary

    Computes the net amount of annual cash flow required to break even.

    $2.19

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