Jojola Corporation is investigating buying a small used aircraft for the use of its executives. The aircraft would have a useful life of 5 years. The company uses a discount rate of 13% in its capital budgeting. The net present value of the initial investment and the annual operating cash cost is -$439,238. Management is having difficulty estimating the annual benefit of having the aircraft and estimating the salvage value of the aircraft. (Ignore income taxes.)Refer to Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.Ignoring any salvage value, to the nearest whole dollar how large would the annual benefit have to be to make the investment in the aircraft financially attractive?
A. $57,101
B. $124,890
C. $87,848
D. $439,238
Answer: B
You might also like to view...
The component costs of capital are market-determined variables in the sense that they are based on investors' required returns.
Answer the following statement true (T) or false (F)
6) An effective way of projecting self-confidence is to show good posture both when standing as well as while sitting in a chair
Indicate whether the statement is true or false.
Which of the following is a term used to describe an information asset whose attributes distinguish it from all other kinds of content?
a. Tactic. b. Content strategy. c. Content type. d. Channel type. e. Unique identifier.
If a person dies without a will and without any heirs or next of kin, her property:
A) escheats to a vestry commission. B) vests in her neighbors. C) vests in her church. D) escheats to the state.