gnore income taxes.) lick here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. ow large would the annual intangible benefit have to be to make the investment in the aircraft financially attractive? Multiple Choice $474,600 $135,678 $79,100

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 28P: Friedman Company is considering installing a new IT system. The cost of the new system is estimated...
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The management of Byrge Corporation is investigating buying a small used aircraft to use in making airborne inspections of its above-ground pipelines. The aircraft would have a
useful life of 6 years. The company uses a discount rate of 18% in its capital budgeting. The net present value of the investment, excluding the intangible benefits, is -$474,600.
(Ignore income taxes.)
Click here to view Exhibit 12B-1 and Exhibit 128-2, to determine the appropriate discount factor(s) using the tables provided.
How large would the annual intangible benefit have to be to make the investment in the aircraft financially attractive?
Multiple Choice
O
O
O
$474,600
$135,678
$79,100
$85,428
Transcribed Image Text:The management of Byrge Corporation is investigating buying a small used aircraft to use in making airborne inspections of its above-ground pipelines. The aircraft would have a useful life of 6 years. The company uses a discount rate of 18% in its capital budgeting. The net present value of the investment, excluding the intangible benefits, is -$474,600. (Ignore income taxes.) Click here to view Exhibit 12B-1 and Exhibit 128-2, to determine the appropriate discount factor(s) using the tables provided. How large would the annual intangible benefit have to be to make the investment in the aircraft financially attractive? Multiple Choice O O O $474,600 $135,678 $79,100 $85,428
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