Question
Barrick Company has a payback goal of 3 years on new equipment acquisitions. A new sorter is being evaluated that costs $450,000 and has a
Barrick Company has a payback goal of 3 years on new equipment acquisitions.
A new sorter is being evaluated that costs $450,000 and has a 5-year life. Straight-line depreciation will be used; no salvage is anticipated.
Barrick is subject to a 40% income tax rate.
How much reduction in annual cash operating costs must the new equipment generate in order to meet the company's payback goal?
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Financial & Managerial Accounting
Authors: Jan Williams, Sue Haka, Mark Bettner, Joseph Carcello
15th Edition
0073526991, 9780073526997
