Mini Inc. is contemplating a capital project costing $49,631. The project will provide annual cost savings of $19,000 for 3years and have a salvage value of $2,000. The company's required rate of return is 10%. The company uses straight-linedepreciation.Year1232This project isPresent Valueof 1 at 10%.909826751PV of an Annuityof 1 at10%.9091.7362.487O unacceptable because it has a negative NPV.O acceptable because it has a zero NPV.O acceptable because it has a positive NPVO unacceptable because it ears a rate less than 10%.

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Description: Mini Inc. is contemplating a capital project costing $49,631. The project will provide annual cost savings of $19,000 for 3years and have a salvage value of $2,000. The company's required rate of return is 10%. The company uses straight-linedeprecia

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Mini Inc. is contemplating a capital project costing $49,631. The project will provide annual cost savings of $19,000 for 3 years and have a salvage value of $2,000. The company's required rate of return is 10%. The company uses straight-line depreciation. Year 1 2 3 This project is Present Value of 1 at 10% .909 826 751 PV of an Annuity of 1 at 10% .909 1.736 2.487 O unaceptable because it has a negative NPV. O acceptable because it has a zero NPV O acceptable because it has a positive NPV O unacceptable because it ears a rate less than 10%.

Mini Inc. is contemplating a capital project costing $49,631. The project will provide annual cost savings of $19,000 for 3 years and have a salvage value of $2,000. The company's required rate of return is 10%. The company uses straight-line depreciation. Year 1 2 3 This project is Present Value of 1 at 10% .909 826 751 PV of an Annuity of 1 at 10% .909 1.736 2.487 O unaceptable because it has a negative NPV. O acceptable because it has a zero NPV O acceptable because it has a positive NPV O unacceptable because it ears a rate less than 10%.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5PB: Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated...

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