Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sentinel Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $259,000 and will yield the

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Sentinel Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $259,000 and will yield the following expected cash flows. Management requires investments to have a payback period of 4 years, and it requires a 10% return on investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the table provided.) Period Cash Flow $ 48,700 52,800 76,000 94,300 126,100 Required: 1. Determine the payback period for this investment. 2. Determine the break-even time for this investment. 3. Determine the net present value for this investment. Required 1 Required 2 Required 3 Determine the payback period for this investment. (Enter cash outflows with a minus sign. Round your Payl to 1 decimal place.) Year Cash inflow (outflow) Cumulative Net Cash Inflow (outflow) $ (259,000) 0 1 2 3 4 5 Payback period = Required 1 Required 2 > Year Table factor Present Value of Cash Flows Cash inflow (outflow) $ (259,000) Cumulative Present Value of Cash Flows 0 Break-even time = Required 1 Required 2 Required 3 Determine the net present value for this investment. Net present value

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_2

Step: 3

blur-text-image_3

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

Horngrens Cost Accounting A Managerial Emphasis

Authors: Srikant Datar, Madhav Rajan

17th Global Edition

129236307X, 9781292363073

More Books

Students also viewed these Accounting questions

Question

What are employee assistance programs and wellness programs?

Answered: 1 week ago