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The Yakima Yoyo Company is evaluating expanding its operations and considering purchasing a new production facility at a cost of $350,000. Yakima desires an internal
The Yakima Yoyo Company is evaluating expanding its operations and considering purchasing a new production facility at a cost of $350,000. Yakima desires an internal rate of return on this new facility of 8% and estimates it will have a useful life of 20 years. Yakima uses the Present Value of an Annuity of $1 table to determine an annuity factor of 9.8182. Given these parameters, how much yearly cash flow would this facility need to produce to justify its purchase?
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