(Uncertain project life) Caldwell Hydraulic is evaluating a potential investment project that would have an initial cost...

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(Uncertain project life) Caldwell Hydraulic is evaluating a potential investment project that would have an initial cost of $200,000 and will return $75,000 an¬ nually for 6 years. The company’s cost of capital is 10 percent. Assume that the company is fairly certain regarding the initial cost and the annual return of $75,000, but uncertain as to how many years the $75,000 cash flows will be realized. How many years must the project generate cash flows of $75,000 to be minimally acceptable (ignore tax)?

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Financial Accounting

ISBN: 9780070891739

1st Canadian Edition

Authors: Robert Libby

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