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The hotel just invested new complete culinary equipment for its restaurant that costs $800,000. The equipment is expected to generate annual cash inflows of $250,000.
- The hotel just invested new complete culinary equipment for its restaurant that costs $800,000. The equipment is expected to generate annual cash inflows of $250,000. The equipment is expected to have a useful life of five years with no salvage value while the cost of capital is 14 percent.
- Please calculate:
- Payback for Glady's
- If depreciation is $190,000 per year, Glady's accounting rate of return/ARR
- Excluding the effect of income taxes, Glady's NPV
- Which one is better between NPV and IRR to evaluate Capital Investment?
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Financial Accounting an introduction to concepts, methods and uses
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
13th Edition
978-0538776080, 324651147, 538776080, 9780324651140, 978-0324789003
