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(ignore income taxes in this problem) Boise, Inc. is investigating buying a small used aircraft for the use of its executives. The aircraft would have
(ignore income taxes in this problem) Boise, Inc. is investigating buying a small used aircraft for the use of its executives. The aircraft would have a useful life of 8 years. The company uses a discount rate of 14% in its capital budgeting. The net present value of the investment, excluding the salvage value of the aircraft, is $488,487 (note negative). Management is having difficulty estimating the salvage value of the aircraft. To the nearest whole dollar, how large would the salvage value of the aircraft (in year 8 dollars) have to be to make the investment in the aircraft financially attractive? Show your work for chance at partial credit
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