Question
25. Chee Corporation has gathered the following data on a proposed investment project: (Ignore income taxes in this problem.) Investment required in equipment $680,000 Annual
25. Chee Corporation has gathered the following data on a proposed investment project: (Ignore income taxes in this problem.)
Investment required in equipment $680,000
Annual cash inflows $66,000
Salvage value $0
Life of the investment 20 years
Required rate of return 7%
The company uses straight-line depreciation. Assume cash flows occur uniformly throughout a year except for the initial investment.
The payback period for the investment is closest to:
0.1 years 1.0 years 8.3 years 10.3 years
8. Data concerning Wang Corporations single product appear below:
Selling price per unit $350.00
Variable expense per unit $73.50
Fixed expense per month $178.330
The break-even in monthly dollar sales is closest to:
$227,000 $274,670 $179,330 $454,000
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