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Pearl manufacturing is considering an investment in equipment costing $480,000. The equipment will be depreciated on a straight-line basis over a five-year period with an
Pearl manufacturing is considering an investment in equipment costing $480,000. The equipment will be depreciated on a straight-line basis over a five-year period with an estimated residual value of $120,000. The expected net cash inflows from the investment are:
year1: $70,000
year2: 80,000
year3: 120,000
year4: 120,000
year5: 120,000
Total: 510,000
Calculate the payback period for this investment
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