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se 9-13 Monty Cosmetics is planning to expand its product line to include stage

ID: 2509563 • Letter: S

Question

se 9-13 Monty Cosmetics is planning to expand its product line to include stage equipment will have a useful life of 10 years. makeup. The expansin wil require the company to purchase special mixing equipment at a cost of $1 18,510. The I rate of return method? (For calculation (a) If Monty uses a 14% hurdle rate, what is the minimum annual purposes, use 4 decimal places as displayed in the factor table provided and net cash inflow required to make this project acceptable under the round final answer to 0 decimal places, e.g. 58,971)

Explanation / Answer

Calculate minimum annual cash flow :

Net present value = Present value of cash inflow-Present value of cash outflow

0 = (X*5.21612)-118510

X(minimum annual cash flow) = 22720