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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 |
