A company is considering the purchase of a new piece of equipment that costs $50,500 and...
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A company is considering the purchase of a new piece of equipment that costs $50,500 and will have a salvage value of $5,050 after 9 years. Using the new piece of equipment will increase annual cash flows by $6,050. Required: a. What is the payback period for the new piece of equipment? b. Suppose that the increase in cash flows was $10,050 in the first year, then decreased by $1,000 each year over the life of the equipment. What is the payback period for the equipment? A company is considering the purchase of a new piece of equipment that costs $50,500 and will have a salvage value of $5,050 after 9 years. Using the new piece of equipment will increase annual cash flows by $6,050. Required: a. What is the payback period for the new piece of equipment? b. Suppose that the increase in cash flows was $10,050 in the first year, then decreased by $1,000 each year over the life of the equipment. What is the payback period for the equipment?
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Accounting Texts and Cases
ISBN: 978-1259097126
13th edition
Authors: Robert Anthony, David Hawkins, Kenneth Merchant
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