Lunar Tech’s management is investigating the purchase of a s…
Lunar Tech’s management is investigating the purchase of a small used drone to use in conducting visual inspections of its outdoor industrial facilities. The drone would have a useful life of 5 years. Lunar Tech uses a discount rate of 10% in its capital budgeting. The net present value of the investment, excluding intangible benefits, is- $395,300. (Ignore income taxes.) How large would the annual intangible benefit have to be to make the investment in the drone financially attractive? Note: You will need the PV tables for this question.