What would the annual net cash inflows from this project

Reference no: EM13572456

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 $100,000 now and the useful life of the project is 12 years. Additional working capital needed immediately for this project would be $20,000; the working capital would be released for use elsewhere at the end of the 12-year period. The equipment and other materials used in the project would have a salvage value of $15,000 in 12 years. Finney's discount rate is 15%. (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? (Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount.)

Reference no: EM13572456

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