Question
The Turnkey Company is considering buying new equipment. The following table includes the estimated Cash Flows associated with the new equipment. A.Complete the table below
- The Turnkey Company is considering buying new equipment. The following table includes the estimated Cash Flows associated with the new equipment.
A.Complete the table below using the Payback Period Method
| Year | Cash Flow | Cumulative |
| 0 | -32,000 |
|
| 1 | 0 |
|
| 2 | 12,000 |
|
| 3 | 21,000 |
|
| 4 | 10,000 |
|
B.What is the Payback Period for the new equipment? _______
C.Assume Turnkey management wants its money back within 3 years. Would management purchase this new equipment if Turnkey used the Payback Period Method? ____ Explain.
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Financial Data Analytics Theory And Application
Authors: Sinem Derindere Köseo?lu
1st Edition
303083798X,3030837998
