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A company is considering updating its obsolete plant and equipment. The new equipment would be assumed to have a ten-year useful life. A discounted cash
A company is considering updating its obsolete plant and equipment. The new equipment would be assumed to have a ten-year useful life. A discounted cash flow analysis of the costs and benefits showed that the plant and equipment would have a net present value of ($452,000). However, uncertainty exists as to the intangible benefits of upgrading the plant and equipment. The company is subject to a cost of capital of 12% How much would the plant and equipment's intangible benefits have to amount to annually to make the investment worthwhile? A $40,000 B. $20.000 O C.$80,000 D.$32,653
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