The Sleek Ring Company, a leading producer of fine cast silver jewelry, is considering the purchase of

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The Sleek Ring Company, a leading producer of fine cast silver jewelry, is considering the purchase of new casting equipment that will allow it to expand its product line. The up-front cost of the equipment is $690,000. The company expects the equipment to produce steady income throughout its 15-year life. 

a. If Sleek Ring requires an 8% return on its investment, what minimum yearly cash inflow will be necessary for the company to go forward with this project?
b. How would the minimum yearly cash inflow change if the company required an 11% return on its investment?

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Principles of Managerial Finance

ISBN: 978-0134476315

15th edition

Authors: Chad J. Zutter, Scott B. Smart

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