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The Bramble Company is planning to purchase $475,400 of equipment with an estimated seven-year life and no estimated salvage value. The company has projected the
The Bramble Company is planning to purchase $475,400 of equipment with an estimated seven-year life and no estimated salvage value. The company has projected the following annual cash flows for the investment. Projected Cash Flows Year $203,000 154,000 108,000 62,400 62,400 44,000 44,000 Total $677,800 (a) Calculate the payback period for the proposed equipment purchase. Assume that all cash flows occur evenly throughout the year. Payback period years and months. (b) If Bramble requires a payback period of three years or less, should the company make this investment? The company make this investment
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