Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 2) A Company is planning to buy a new machinery for 175.000 dollars. This machinery will create cash inflows in a five-year period (economic

image text in transcribed

Question 2) A Company is planning to buy a new machinery for 175.000 dollars. This machinery will create cash inflows in a five-year period (economic life) as follows. There is no expected salvage value of machinery at the end its economic life. 1 50.000 dollars 2 60.000 3 65.000 4 40.000 5 30.000 a) Calculate the pay back period. b) Calculate the net present value (Assume the discount rate of the company is 10%) c) Make your decision and explain: Why? Present value of 1 dollar Period Discount rate (10%) 1 0,909 2 0,826 3 0,751 4 0,683 5 0,621

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Forensic And Investigative Accounting

Authors: Professor D. Larry Crumbley, Lester E. Heitger, G. Stevenson Smith

8th Edition

0808046241, 9780808046240

More Books

Students also viewed these Accounting questions