Harrison Contracting considered a maintenance contract for Canadian National Railway (CN). The CN contract is for 8 years, and brings in revenue of $28,000 per year, but the cost of equipment needed and annual expenses result in an NPV of -$12,368 at your firm's MARR of 12%. What additional annual revenue would CN's contract need to bring in to make it worthwhile for your firm to undertake the CN contract?

Harrison Contracting considered a maintenance contract for Canadian National Railway (CN). The CN contract is for 8 years, and brings in revenue of $28,000 per year, but the cost of equipment needed and annual expenses result in an NPV of -$12,368 at your firm's MARR of 12%. What additional annual revenue would CN's contract need to bring in to make it worthwhile for your firm to undertake the CN contract?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter12: Capital Investment Decisions

Section: Chapter Questions

Problem 21BEA

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