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Lett Corporation is investigating buying a small used aircraft for the use of its executives. The aircraft would have a useful life of 12 years.
Lett Corporation is investigating buying a small used aircraft for the use of its executives. The aircraft would have a useful life of 12 years. The company uses a discount rate of 17% in its capital budgeting. The net present value of the investment, excluding the salvage value of the aircraft, is $(580,147). Click here to view Exhibit 8B-1 to determine the appropriate discount factor(s) using tables. Management is having difficulty estimating the salvage value of the aircraft. How large would the salvage value of the aircraft have to be to make the investment in the aircraft financially attractive? (Round your final answer to the nearest dollar amount.)
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