The finney company is reviewing the possibility of

Reference no: EM13572182

The Finney Company is reviewing the possibility of remodeling one of its showrooms and buying some new equipment to improve sales operations. The remodeling would cost $270,000 now and the useful life of the project is 15 years. Additional working capital needed immediately for this project would be $75,000; the working capital would be released for use elsewhere at the end of the 15-year period. The equipment and other materials used in the project would have a salvage value of $55,000 in 15 years. Finney's discount rate is 13%. (Ignore income taxes.)

Click here to view Exhibit 13B-1 and Exhibit 13B-2 to determine the appropriate discount factor(s) using tables.

What would the annual net cash inflows from this project have to be in order to justify investing in remodeling?

Reference no: EM13572182

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