Question: Year Operating Cash Flow Salvage Value 0 -$10,000 1 $5,000 $8,000 Salvage value if the equipment is sold at the end of year 1 2
| Year | Operating Cash Flow | Salvage Value | |||
| 0 | -$10,000 | ||||
| 1 | $5,000 | $8,000 | Salvage value if the equipment is sold at the end of year 1 | ||
| 2 | $4,000 | $4,000 | Salvage value if the equipment is sold at the end of year 2 | ||
| 3 | $4,000 | $1,000 | Salvage value if the equipment is sold at the end of year 3 | ||
| 4 | $2,000 | $0 | Salvage value if the equipment is sold at the end of year 4 | ||
| WACC = | 9% | ||||
| How many years should this company keep the project going? The answer is either 1 year, 2 years, 3 years or 4 years. | |||||
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