Assume the following information for a capital budgeting proposal with a five-year time horizon: Initial investment: Cost of equipment (zero salvage value) $ 560, 000 Annual revenues and costs: $ 300, 000 $ 130,000 $ 50,000 $ 40,000 Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket costs Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. If the company's discount rate is 12%, then the net present value for this Investment is closest to: Multiple Cholce $271,600. S171,600). $1271,600). $(91.350).
Assume the following information for a capital budgeting proposal with a five-year time horizon: Initial investment: Cost of equipment (zero salvage value) $ 560, 000 Annual revenues and costs: $ 300, 000 $ 130,000 $ 50,000 $ 40,000 Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket costs Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. If the company's discount rate is 12%, then the net present value for this Investment is closest to: Multiple Cholce $271,600. S171,600). $1271,600). $(91.350).
Chapter9: Capital Budgeting Techniques
Section: Chapter Questions
Problem 9PROB
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