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ANSWER QUISTIONS FULLY Management is evaluating the purchase of a new machine. Calculate the average rate of return given the following info Cost of new
ANSWER QUISTIONS FULLY
Management is evaluating the purchase of a new machine. Calculate the average rate of return given the following info Cost of new machine Residual value Estimated total income from machine Expected useful life $500,000 $200,000 (total for 4 years) 4 years Cash payback method Payback period time required for net cash flow to equal the cost of the new machine B. Cash payback period = Initial cost Annual net cash inflows This is the formula for equal annual net cash inflows each year. Management is evaluating the purchase of the following new machine. Determine the cash payback period for the new machine when the net cash inflows are equal each year. $200,000 50,000 30,000 20,000 Cost of new machine Cash revenues from machine per year Expenses of machine per year Depreciation per yearStep by Step Solution
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