Edelman Engineering is considering a piece of equipment in this year's capital budget. The initial cash outlay for the truck is -$148,000. The firm's cost
Edelman Engineering is considering a piece of equipment in this year's capital budget. The initial cash outlay for the truck is -$148,000. The firm's cost of capital, WACC, is 11 percent. The expected cash flows are as follows: YEAR Cash Flow 1 $29,600 2 $29,600 3 $29,600 4 $29,600 5 $29,600 6 $29,600 7 $29,600 8 $10,000 a. Calculate payback period. b. Calculate the net present value. What is your decision?
Step by Step Solution
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Step: 1
a Payback Period The payback period is the number of years it takes for the initial cash outlay to b...
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Step: 2
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Authors: Eugene F. Brigham and Michael C. Ehrhardt
13th edition
1439078106, 111197375X, 9781439078105, 9781111973759, 978-1439078099
