(Ignore Income Taxes in This Problem

question 162

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 the cash inflows, 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?

• A)$379, 100
• B)$2, 354, 210
• C)$23, 542
• D)$235, 421

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Definitions:

Disloyal Planters

Plantation owners in the Southern United States who were perceived as unfaithful or traitorous to the Union during the Civil War.

Former Slaves

Individuals who were previously enslaved but gained freedom, often after legal abolition of slavery or through escape.

Black Ministers

Religious leaders within the African American community who often play a significant role in cultural and social activism.

Reconstruction

The period after the Civil War in the United States when the southern states were reorganized and reintegrated into the Union from 1865 to 1877.