What minimum yearly cash inflow

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Reference no: EM13725062

Cash inflow x PVIFA (12%,10) -750,000. I don't understand how to calculate this please explains?

The complete question is below

A leading producer of fine cast silver jewellery is considering the purchase of new casting equipment that will allow it to expand its product line. The up-front cost of the equipment is $750,000. The company expects that the equipment will produce steady income throughout its 10-year life.

a. If One Ring requires a 9% return on its investment, what minimum yearly cash inflow will be necessary for the company to go forward with this project?

b. How would the minimum yearly cash inflow change if the company required a 12% return on its investment?

Reference no: EM13725062

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