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A shoe manufacturer is evaluating new equipment that would custom fit athletic shoes. The new equipment costs $92,000 and will generate $37,000 in net
A shoe manufacturer is evaluating new equipment that would custom fit athletic shoes. The new equipment costs $92,000 and will generate $37,000 in net cash flows for five years. (Negative cumulative cash flows should be indicated with a minus sign.) Determine the break-even time for this equipment. Present Year Net Cash Flow x Value of 1 Present Value of Net Cash at 12% Flows Cumulative Present Value of Net Cash Flows Initial investment $ (92,000) x 1.0000= $ (92,000) $ (92,000) Year 1 37,000 x 0.8929 Year 2 37,000 x 0.7972= Year 3 37,000 x 0.7118 Year 4 37,000 x 0.6355 Year 5 37,000 x 0.5674 (Round break even time answers to two decimal places)
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