The management of Osborn Corporation is investigating an investment in equipment that would have a useful life of 5 years. The company uses a discount rate of 12% in its capital budgeting. The net present value of the investment, excluding the annual cash inflow, is -$404,614. How large would the annual cash inflow have to be to make the investment in the equipment financially attractive? (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. Multiple Choice $48,554 $80.923 $112.237

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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The management of Osborn Corporation is investigating an investment in equipment that would have a useful life of 5 years. The company uses a discount rate of 12% in its capital
budgeting. The net present value of the Investment, excluding the annual cash inflow, is -$404,614. How large would the annual cash inflow have to be to make the investment in the
equipment financially attractive? (Ignore income taxes.)
Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.
Multiple Choice
$48,554
$80.923
$112.237
$404.614
O O O
Transcribed Image Text:The management of Osborn Corporation is investigating an investment in equipment that would have a useful life of 5 years. The company uses a discount rate of 12% in its capital budgeting. The net present value of the Investment, excluding the annual cash inflow, is -$404,614. How large would the annual cash inflow have to be to make the investment in the equipment financially attractive? (Ignore income taxes.) Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. Multiple Choice $48,554 $80.923 $112.237 $404.614 O O O
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