Estimating annual cash flows to make investment attractive
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(Ignore income taxes in this problem) The management of Osborn Corporation is investigating an investment in equipment that would have a useful life of 8 years. The company uses a discount rate of 15% in its capital budgeting. The net present value of the investment, excluding the annual cash inflow, is $-501,414. To the nearest whole dollar how large would the annual cash inflow have to be to make the investment in the equipment financially attractive? (Round "PV Factor" to 3 decimal places.)
$111,748
$113,504
$50,141
$112,798
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Solution Summary
Solution describes the steps to determine annual cash flows for a given discount rate sothat investment is financially attractive.
Education
- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
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