Question
The management of Osborn Corporation is investigating an investment in equipment that would have a useful life of 7 years. The company uses a discount
The management of Osborn Corporation is investigating an investment in equipment that would have a useful life of 7 years. The company uses a discount rate of 12% in its capital budgeting. The net present value of the investment, excluding the annual cash inflow, is $401,814. (Ignore income taxes.) Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. How large would the annual cash inflow have to be to make the investment in the equipment financially attractive? (Round your intermediate calculations and final answer to the nearest whole dollar amount.)
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