Yoshika Landscaping is contemplating purchasing a new ditchdigging machine that promises savings of $$ 5,600$ per year

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Yoshika Landscaping is contemplating purchasing a new ditchdigging machine that promises savings of $\$ 5,600$ per year for 10 years. The machine costs $\$ 21,970$, and no salvage value is expected. The company's cost of capital is 12 percent. You have been asked to advise Yoshika relative to this capital investment decision. As part of your analysis, compute:

1. The payback period.

2. The unadjusted rate of return.

3. The net present value.

4. The payback reciprocal.

5. The internal rate of return.

What factors besides your quantitative analysis should be considered in making this decision?

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Survey Of Accounting

ISBN: 9780538846172

1st Edition

Authors: James D. Stice, W. Steve Albrecht, Earl Kay Stice, K. Fred Skousen

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