Balloons by sunset (bbs) is considering the purchase of two new hot air balloons so that it can expand its desert sunset tours. various information about the proposed investment follows:

Respuesta :

Answer:

The proposed investment follows the following,

Two hot air balloons previous investment is calculated to be $420,000

Useful life for 10 years

Salvage value is calculated to be $ 50,000

Annual net income generated is $ 37,800

BBS’s cost of capital is calculated to be 11 % assuming straight line depreciation method is used.