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A shoe manufacturer is evaluating new equipment that would custom fit athletic shoes. The new equipment costs $117,000 and will generate $45,000 in net
A shoe manufacturer is evaluating new equipment that would custom fit athletic shoes. The new equipment costs $117,000 and will generate $45,000 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 Cumulative Present at 12% Flows Value of Net Cash Flows Initial investment $ (117,000) x Year 1 45,000 x 1.0000 = 0.8929 $ (117,000) $ (117,000) Year 2 45,000 x 0.7972= Year 3 45,000 x 0.7118 = Year 4 45,000 x 0.6355= Year 5 45,000 x 0.5674 (Round break-even time answers to two decimal places.)
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