Asked by Terrance Guvakuva on May 05, 2024
Verified
Ignoring any salvage value, to the nearest whole dollar how large would the additional cash flow per year from the intangible benefits have to be to make the investment in the automated equipment financially attractive?
A) $40,820
B) $22,229
C) $28,009
D) $155,606
Intangible Benefits
Non-monetary advantages that cannot be easily quantified or directly measured, such as brand recognition, customer loyalty, and employee satisfaction.
Automated Equipment
Machinery and tools that operate independently or with minimal human intervention, often used to improve efficiency in manufacturing processes.
Financially Attractive
Describes investments, projects, or opportunities that are expected to provide a high return relative to their cost.
- Grasp the impact of intangible benefits and costs on the financial attractiveness of investments.
Verified Answer
= Negative net present value to be offset ÷ Present value factor
= $155,606 ÷ 3.812 = $40,820
Learning Objectives
- Grasp the impact of intangible benefits and costs on the financial attractiveness of investments.
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