Nova Cloud’s management is considering investing in aircraft…
Nova Cloud’s management is considering investing in aircraft that would have a useful life of 7 years. The company uses a discount rate of 12% in its capital budgeting. The net present value of the investment, excluding the annual cash inflow, is −$405,814. (Ignore income taxes.) How large would the annual cash inflow have to be to make Nova’s investment in the aircraft financially attractive? Note: You will need the PV tables for this question.