Define the term Salvage value
Chee Company has gathered the following data on a proposed investment project:
Investment required in equipment …………. $240,000
Annual cash inflows ……………………………. $50,000
Salvage value …………………………………….. $0
Life of the investment …………………………. 8 years
Required rate of return ………………………… 10%
Assets will be depreciated using straight
line depreciation method
Required:
Using the net present value and the internal rate of return methods, is this a good investment?
Chee Company has gathered the following data on a proposed investment project:
Investment required in equipment …………. $240,000
Annual cash inflows ……………………………. $50,000
Salvage value …………………………………….. $0
Life of the investment …………………………. 8 years
Required rate of return ………………………… 10%
Assets will be depreciated using straight
line depreciation method
Required:
Using the net present value and the internal rate of return methods, is this a good investment?
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