Croce, Incorporated, Is Investigating an Investment in Equipment That Would

question 47

Multiple Choice

Croce, Incorporated, is investigating an investment in equipment that would have a useful life of 7 years. The company uses a discount rate of 8% in its capital budgeting. The net present value of the investment, excluding the salvage value, is −$515,967. To the nearest whole dollar how large would the salvage value of the equipment have to be to make the investment in the equipment financially attractive? (Ignore income taxes.) Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided.

• A) $41,277
• B) $885,021
• C) $515,967
• D) $6,449,588

---

Definitions:

Credible

Being believable or worthy of trust and confidence.

Prewriting

The initial stage of the writing process, involving brainstorming, planning, and organizing ideas before drafting the main content.

Prewriting

The initial stage of the writing process, involving brainstorming, outlining, and organizing ideas before drafting.

Formal Language

A structured system of communication used in professional, academic, or ceremonial contexts.