(Ignore Income Taxes in This Problem

question 17

Multiple Choice

(Ignore income taxes in this problem. ) The management of Kobler Corporation is investigating an investment in equipment that would have a useful life of 5 years.The company uses a discount rate of 10% in its capital budgeting.Good estimates are available for the initial investment and the annual cash operating outflows, but not for the annual cash inflows and the salvage value of the equipment.The net present value of the initial investment and the annual cash outflows is -$235, 421. Ignoring any salvage value, to the nearest whole dollar how large would the annual cash inflow have to be to make the investment in the equipment financially attractive?

• A)$62, 100
• B)$23, 542
• C)$235, 421
• D)$47, 084

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Definitions:

Group Diversity

The presence of a wide range of variation in qualities among members of a group, such as age, gender, ethnic background, and socio-economic status.

Transactive Memory

A shared system for encoding, storing, and retrieving knowledge within close relationships or groups.

Group Behavior

Refers to the ways in which people behave, interact, and influence each other in a collective context.

Brainstorming

A collective approach intended to elicit a high volume of solutions for a problem.