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The management of Byrge Corporation is investigating buying a small used aircraft to use in making airborne inspections of its above-ground pipelines. The aircraft
The management of Byrge Corporation is investigating buying a small used aircraft to use in making airborne inspections of its above-ground pipelines. The aircraft would have a useful life of 4 years. The company uses a discount rate of 20% in its capital budgeting. The net present value of the investment, excluding the intangible benefits, is -$316,440. (Ignore income taxes.) Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using the tables provided. How large would the annual intangible benefit have to be to make the investment in the aircraft financially attractive? Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Multiple Choice $316,440 $122,225 $79,110 $63,288
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