Goldman Corp. is considering an investment in new automated equipment. The equipment will save $275,000 per year in labor costs. The equipment will cost $1,500,000 and is expected to have a life of seven years. The company requires a minimum 12% return on all purchases. Management expects this equipment to provide a certain amount of intangible benefits such as an overall higher quality of output and greater flexibility. What dollar value per year would management have to attach to these intangible benefits to make the decision to invest in the equipment? (Ignore income tax considerations for this problem)

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The Answer of Goldman Corp. is considering an investment in new automated equipment. The equipment will save $275,000 per year in labor costs. The equipment will cost $1,500,000 and is expected to have a life of seven years. The company requires a minimum 12% return on all purchases. Management expects this equipment to provide a certain amount of intangible benefits such as an overall higher quality of output and greater flexibility. What dollar value per year would management have to attach to these intangible benefits to make the decision to invest in the equipment? (Ignore income tax considerations for this problem)