Question: Assume that the required rate of return for investment projects
Assume that the required rate of return for investment projects at Rippenstock Corporation is 12 percent. One department has proposed investment in new equipment with a 10-year life span and a present value of expected future annual cash flows of $120,000. The equipment’s initial outlay cost is $125,000 and it has a salvage value of $10,000. Will this investment project meet the required rate of return for the company?
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