Macoupin Company purchased an asset for $275,000. It is expected to provide an additional $66,000 of annual net cash inflows. The asset has a 10-year life and an expected salvage value of $22,000. The hurdle rate is 12%. The present value of an annuity factor of 12% for 10 years is 5.65, and the present value of $1 discounted for 10 years at 12% is 0.322. Given the data provided, calculate the minimum amount of annual cash inflows that would provide the 12% return.

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The Answer of Macoupin Company purchased an asset for $275,000. It is expected to provide an additional $66,000 of annual net cash inflows. The asset has a 10-year life and an expected salvage value of $22,000. The hurdle rate is 12%. The present value of an annuity factor of 12% for 10 years is 5.65, and the present value of $1 discounted for 10 years at 12% is 0.322. Given the data provided, calculate the minimum amount of annual cash inflows that would provide the 12% return.

Macoupin Company Purchased an Asset for $275,000