(Answered): Lajeunesse Corporation uses a discount rate of 19% in its capital budgeting. Partial analysis of an investment in automated equipm…

MC Qu. 128 (Ignore income taxes in this problem.) Lajeunesse Corporation... gri e income ta es n this problem La e esse Corporation uses dscount te of19% n its capital budgeting. Partia ana ysis of an estment n a nomated equipment with. setu ife of 8 years has thus far yielded a net present value of -$127,991 This analysis did not include any estimates of the intangible benefits of automating this process nor did it include any estimate ot the savage velue of the equipment Click here to view Exhibt 138-2 to determine the approprlate discount factoris) using tables. Ignoring any salvage velue, to the nearest whole dollar how large would the additional cash flow per year from the intangible benefits have to be to make the investment in the automated equipment financially attractive? O $127.991 O $15.999 O $32.370 O $24,318

Lajeunesse Corporation uses a discount rate of 19% in its capital budgeting. Partial analysis of an investment in automated equipment with. useful life of 8 years has thus far yielded a net present value of -$127,991. This analysis did not include any estimates of the intangible benefits of automating this process nor did it include any estimate of the savage value of the equipment. Click here to view Exhibit 138-2 to determine the appropriate discount factor(s) using tables. Ignoring any salvage value, to the nearest whole dollar how large would the additional cash flow per year from the intangible benefits have to be to make the investment in the automated equipment financially attractive? $127,991 $15,999 $32,370 $24,318

Expert Answer

 

$32,370
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Statementshowing Computations
Paticulars Amount
NPV    (127,991.00)
PVf for 8 Years               3.9540
Additional cash flow per yearfrom intangible benefits = 127,991/3.954         32,370.01
Time PVF at 19%
                                                                                 1.00                 0.840
                                                                                 2.00                 0.706
                                                                                 3.00                 0.593
                                                                                 4.00                 0.499
                                                                                 5.00                 0.419
                                                                                 6.00                 0.352
                                                                                 7.00                 0.296
                                                                                 8.00                 0.249
PVf for 8 Years                 3.954
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