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 5 years. The company uses a discount rate of 12% in its capital budgeting. The net present value of the investment, excluding the intangible benefits, is $395,800. (Ignore income taxes.)

How large would the annual intangible benefit have to be to make the investment in the aircraft financially attractive?

Multiple Choice

• $79,160

• $109,792

• $47,496

• $395,800