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Company uses a discount rate of 12% in all of its capital budgeting decisions. Management is considering an investment that has a 5 year life.
Company uses a discount rate of 12% in all of its capital budgeting decisions. Management is considering an investment that has a 5 year life. Excluding the salvage value, the net present value of the investment is -$2,819,088.
1.Based on this information, how much would the investment have to generate in annual cash flows in order to make the investment financially attractive?
2.how much would the salvage value of the investment have to be at the end of the investment's life in order to make it financially attractive?
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