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A company is considering the purchase of a new piece of equipment that costs $50,100 and will have a salvage value of $5,010 after years.
A company is considering the purchase of a new piece of equipment that costs $50,100 and will have a salvage value of $5,010 after years. Using the new piece of equipment will increase annual cash flows by $6,010. Required: a. What is the payback period for the new piece of equipment? b. Suppose that the increase in cash flows was $10,010 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? Complete this question by entering your answers in the tabs below. What is the payback period for the new piece of equipment? Note: Round your answer to 2 decimal places. a. What is the payback period for the new piece of equipment? b. Suppose that the increase in cash flows was $10,010 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? Complete this question by entering your answers in the tabs below. Suppose that the increase in cash flows was $10,010 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? Note: Round your answer to 2 decimal places
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