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A company is considering the purchase of equipment.The company's financial goals include a 5% desired rate of return for any investment the company considers.The equipment
A company is considering the purchase of equipment.The company's financial goals include a 5% desired rate of return for any investment the company considers.The equipment under consideration has an estimated useful life of 8 years and an estimated salvage value of $6,200.Production from the equipment should increase the company's annual net cash flow by $12,000 per year.
What is the maximum amount the company should pay for the equipment to achieve the desired rate of return? (round each part to the nearest dollar)
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