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 the annual benefit, to the nearest whole dollar how large would the salvage value of the aircraft have to be to make the investment in the aircraft financially attractive?
A. $3,378,754
B. $57,101
C. $439,238
D. $808,910
Answer: D
You might also like to view...
Which of the following represents a typical supply chain?
A. Suppliers - Customers - Company B. Company - Suppliers - Customers C. Company - Customers - Suppliers D. Suppliers - Company - Customers
________ is defined as the activities used to establish, develop, and maintain customer sales
A) Data mining B) Customer relationship management C) Customer retention D) Customer satisfaction E) Customer differentiation
Sales less variable cost of goods sold is referred to as ________________________________________
Fill in the blank(s) with correct word
In consumer relations, attracting new customers is a more important goal than keeping old customers
Indicate whether the statement is true or false