Question
Assume that a company purchased a new machine for $26,250 that has no salvage value. The machine is expected to save the company $6,000 a
Assume that a company purchased a new machine for $26,250 that has no salvage value. The machine is expected to save the company $6,000 a year in cash operating costs for seven years. The company also expects the machine to provide annual intangible benefits that are difficult to quantify. Assuming the companys hurdle rate is 24%, the minimum value of the intangible benefits that would be required to make this investment acceptable is closest to: Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided.
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