Question
I am attempting to answer a question that you already have answered on your site: https://www.coursehero.com/tutors-problems/Managerial-Accounting/9078397-Chapter-10-P4-Capital-Investment-Decision-Comprehensive-Edge-Com/ Edge Company's production vice president believes keeping up to
I am attempting to answer a question that you already have answered on your site: https://www.coursehero.com/tutors-problems/Managerial-Accounting/9078397-Chapter-10-P4-Capital-Investment-Decision-Comprehensive-Edge-Com/
Edge Company's production vice president believes keeping up to date with technological changes is what makes the company successful and feels that a machine introduced recently would fill an important need. The machine has an estimated useful life of four years, a purchase price of $250,00, and a residual value of $25,000. The company controller has estimated average annual net income of $11,250 and the following case flows for the new machine:
Year 1 - Net Cash Inflow -$75,000
Year 2 - $70,000
Year 3 - $65,000
Year 4 - $60,000
I am attempting to calculate the payback period. The problem uses an excel sheet that asks for the Less cash flow recovery, and for year 4, it tells me the number is not $60,000, which is year 4's net cash flow. What am I supposed to do differently with that number?
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