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Assume that you are thinking about starting your own small business. The equipment cost incurred to start the business would total $330,000. The equipment
Assume that you are thinking about starting your own small business. The equipment cost incurred to start the business would total $330,000. The equipment would have a 5-year useful life and a salvage value of $30,000. After analyzing all the relevant cash flows, you estimate the project's net present value to be $34,081. However, efter further consideration, you decided to revise the equipment's estimated salvage value from $25,000 to $35,000. Assuming a discount rate of 17%, this increase in salvage value will cause the net present value to change by how much? Multiple Choice It will increase by $6650. It will increase by $5,760. It will increase by $3.280. It will increase by $4.560.
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