Spiritlight Ventures is considering the following investment: Investment $140,000 Annual revenues $ 96,000 Annual variable costs $ 32,000 Annual fixed out-of-pocket costs $ 20,000 Salvage value $ 12,000 Discount rate 12% Expected life of project 8 years Ignore income taxes. The present value of the annual cash flow (rounded) is a.$152,538. b.$136,822. c.$204,884. d.$218,592.
Spiritlight Ventures is considering the following investment: Investment $140,000 Annual revenues $ 96,000 Annual variable costs $ 32,000 Annual fixed out-of-pocket costs $ 20,000 Salvage value $ 12,000 Discount rate 12% Expected life of project 8 years Ignore income taxes. The present value of the annual cash flow (rounded) is a.$152,538. b.$136,822. c.$204,884. d.$218,592.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter12: Capital Investment Decisions
Section: Chapter Questions
Problem 21BEA
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Spiritlight Ventures is considering the following investment:
Investment $140,000 Annual revenues $ 96,000 Annual variable costs $ 32,000 Annual fixed out-of-pocket costs $ 20,000 Salvage value $ 12,000 Discount rate 12% Expected life of project 8 years
Ignore income taxes. The present value of the annual cash flow (rounded) isa.$152,538.b.$136,822.c.$204,884.d.$218,592.
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