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The Seago Company is planning to purchase $520,000 of equipment with an estimated seven-year life and no estimated salvage value. The company has projected the
The Seago Company is planning to purchase $520,000 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. (a) Calculate the payback period for the proposed equipment purchase. Assume that all cash flows occur evenly throughout the year. (b) If Seago requires a payback period of three years or less, should the company make this investment
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