(Ignore Income Taxes in This Problem)Lett Corporation Is Investigating Buying

question 140

Multiple Choice

(Ignore income taxes in this problem) Lett Corporation is investigating buying a small used aircraft for the use of its executives.The aircraft would have a useful life of 7 years.The company uses a discount rate of 15% in its capital budgeting.The net present value of the investment,excluding the salvage value of the aircraft,is -$578,739.Management is having difficulty estimating the salvage value of the aircraft.To the nearest whole dollar how large would the salvage value of the aircraft have to be to make the investment in the aircraft financially attractive?

• A)$578,739
• B)$86,811
• C)$3,858,260
• D)$1,539,199

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Definitions:

Situational Factors

External influences that affect an individual's behavioral response in a given situation.

Vroom-Jago Leadership Model

A decision-making framework for leaders that factors in the importance of the decision, the commitment of the team, and the leader's expertise.

Time Requirements

The specific amount of time needed to complete tasks or objectives, often set as deadlines or schedules.

Inverted Pyramid

represents a structure in writing, particularly news, where information is presented in descending order of importance.