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P122 Breakeven cash inflows The Sleek Ring Company, a leading producer of fine cast silver jewelry, is considering the purchase of new casting equipment that
P122 Breakeven cash inflows The Sleek Ring Company, a leading producer of fine cast silver jewelry, is considering the purchase of new casting equipment that will allow it to expand its product line. The up-front cost of the equipment is $690,000. The company expects the equipment to produce steady income throughout its 15-year life.
- If Sleek Ring requires an 8% return on its investment, what minimum yearly cash inflow will be necessary for the company to go forward with this project?
- How would the minimum yearly cash inflow change if the company required an 11% return on its investment?
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