The management of Osborn Corporation is investigating an investment in equipment that would have auseful life of 8 years. The company uses a discount rate of 12% in its capital budgeting. The net presentvalue of the investment, excluding the annual cash inflow, is -$407,414. To the nearest whole dollar howlarge would the annual cash inflow have to be to make the investment in the equipment financiallyattractive? (Ignore income taxes.) Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine theappropriate discount factor(s) using the tables provided.Multiple Choice$48,890$407,414$50,927$82,008

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Description: The management of Osborn Corporation is investigating an investment in equipment that would have auseful life of 8 years. The company uses a discount rate of 12% in its capital budgeting. The net presentvalue of the investment, excluding the annual

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useful life of 8 years. The company uses a discount rate of 12% in its capital value of the investment, excluding the annual cash inflow, is -$407,414. To t large would the annual cash inflow have to be to make the investment in th attractive? (Ignore income taxes.) Click here to view Exhibit 13B-1 and Exhibi appropriate discount factor(s) using the tables provided. Multiple Choice $48,890 $407,414 $50,927 $82,008

useful life of 8 years. The company uses a discount rate of 12% in its capital value of the investment, excluding the annual cash inflow, is -$407,414. To t large would the annual cash inflow have to be to make the investment in th attractive? (Ignore income taxes.) Click here to view Exhibit 13B-1 and Exhibi appropriate discount factor(s) using the tables provided. Multiple Choice $48,890 $407,414 $50,927 $82,008

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 15E: Gina Ripley, president of Dearing Company, is considering the purchase of a computer-aided...

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