Managerial Accounting

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Calculating Net Present Value: RDI


Rising Dawn Industries is considering purchasing a new ambulance for their emergency and transport service for an initial investment of \$130,000. Rising Dawn estimates that the ambulance will yield cash flows of \$30,000 (totaled at the end of the year) per year for five years before requiring major upgrades or an overhaul.

If Rising Dawn's hurdle rate is 4%, the project's NPV is

, and Sassy

invest in this project.