Business, 18.12.2019 19:31 hardwick744

Lukow products is investigating the purchase of a piece of automated equipment that will save $120,000 each year in direct labor and inventory carrying costs. this equipment costs $770,000 and is expected to have a 5-year useful life with no salvage value. the company’s required rate of return is 9% on all equipment purchases. management anticipates that this equipment will provide intangible benefits such as greater flexibility and higher-quality output that will result in additional future cash inflows. required: what dollar value per year would these intangible benefits have to have to make the equipment an acceptable investment? (use the tables to determine the discount rate.)

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