Investment in the equipment financially attractive

Reference no: EM13135181

Picado, Inc. is investigating an investment in equipment that would have a useful life of 8 years. The company uses a discount rate of 9% in its capital budgeting. The net present value of the investment, excluding the salvage value, is -$389,000. 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. $774,900

B. $35,010

C. $389,000

D. $4,322,222

Reference no: EM13135181

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