(Ignore income taxes in this problem.) Jergenson Corporation uses a discount rate of 13% in its capital budgeting. Management is considering an investment in telecommunications equipment with a useful life of 9 years. Excluding the salvage value of the equipment, the net present value of the investment in the equipment is -$581,045.
Required:
How large would the salvage value of the telecommunications equipment have to be to make the investment in the telecommunications equipment financially attractive?

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The Answer of (Ignore income taxes in this problem.) Jergenson Corporation uses a discount rate of 13% in its capital budgeting. Management is considering an investment in telecommunications equipment with a useful life of 9 years. Excluding the salvage value of the equipment, the net present value of the investment in the equipment is -$581,045.
Required:
How large would the salvage value of the telecommunications equipment have to be to make the investment in the telecommunications equipment financially attractive?

(Ignore Income Taxes in This Problem