Question
EE printing is in the evaluation process for the acquisition of a new computer system. The total depreciable base (cost plus installation) is $178,000. The
EE printing is in the evaluation process for the acquisition of a new computer system. The total depreciable base (cost plus installation) is $178,000.
The new equipment will increase Earnings before depreciation and taxes by $60,000 during years 1 to 3 and $33,000 during years 4 to 6.
EE marginal tax rate is 40% and Cost of Capital is 11%
Calculate the Payback Period
PRESENT YOUR ANSWER ROUNDED TO 2 DECIMAL PLACES
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Venture Capital And The Finance Of Innovation
Authors: Andrew Metrick
1st Edition
0470074280, 9780470074282
