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 6 years. The company uses a discount rate of 18% in its capital budgeting. The net present value of the investment, excluding the intangible benefits, is -$474,600. (Ignore income taxes.) Click here to view Exhibit 12B-1 and Exhibit 128-2, 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? Multiple Choice $474,600 $135,678 $79.100 $85,428
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 6 years. The company uses a discount rate of 18% in its capital budgeting. The net present value of the investment, excluding the intangible benefits, is -$474,600. (Ignore income taxes.) Click here to view Exhibit 12B-1 and Exhibit 128-2, 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? Multiple Choice $474,600 $135,678 $79.100 $85,428
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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12q-6
Transcribed Image Text: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 6 years. The company uses a discount rate of 18% in its capital budgeting. The net present value of the investment, excluding the intangible benefits, is -$474,600. (Ignore income
taxes.)
Click here to view Exhibit 12B-1 and Exhibit 12B-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?
Multiple Choice
$474,600
$135,678
$79100
$85,428
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