Question

Drake Limousine Service is considering acquisition of an additional vehicle. The model under consideration will cost $160,000 and have a five-year life and a $45,000 residual value. The company anticipates that the effect on annual net income will be as follows:

.:.

Required
Calculate the net present value of the investment assuming the company has a required rate of return of 14 percent. Should the company invest in the new limousine?



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  • CreatedSeptember 23, 2013
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