Generro Company is considering the purchase of equipment that would cost $36,000 and offer annual cash inflows of $10,500 over its useful life of 5 years. Assuming a destred rate of return of 12%, is the praject acceptable? PV of $1 and PVA of $D (Use appropriete factor(s) from the tables provided.) Multiple Choice No, since the negative net present value indicates the investment will yield a rate of return below the desired rate of retum Yes, since the investment will generate $52,500 in future cash fiows, which is greater than the purchase cost of 536.000. Yes, since the positive net present velue indicates the investment will ean a rate of return greater than 12% The answer cannot be determined
Generro Company is considering the purchase of equipment that would cost $36,000 and offer annual cash inflows of $10,500 over its useful life of 5 years. Assuming a destred rate of return of 12%, is the praject acceptable? PV of $1 and PVA of $D (Use appropriete factor(s) from the tables provided.) Multiple Choice No, since the negative net present value indicates the investment will yield a rate of return below the desired rate of retum Yes, since the investment will generate $52,500 in future cash fiows, which is greater than the purchase cost of 536.000. Yes, since the positive net present velue indicates the investment will ean a rate of return greater than 12% The answer cannot be determined
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 5PA: Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated...
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