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The management of Londo Corporation is investigating buying asmall used aircraft to use in

The management of Londo Corporation is investigating buying asmall used aircraft to use in

The management of Londo Corporation is investigating buying asmall used aircraft to use in making airborne inspections of itsabove-ground pipelines. The aircraft would have a useful life of 5years. The company uses a discount rate of 14% in its capitalbudgeting. The net present value of the investment, excluding theintangible benefits, is −$395,850. (Ignore income taxes in thisproblem)

 

Click here to view Exhibit 13B-2to determine the appropriate discount factor(s) using tables.

 

How large would the annualintangible benefit have to be to make the investment in theaircraft financially attractive? (Round discount factor(s)to 3 decimal places and final answer to the nearest dollaramount.)

$395,850

$115,307

$79,170

$55,419

Abhinav 02-Dec-2019

Answer (UnSolved)

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