The management of Charlton Corporation is considering the purchase of a new mach
ID: 2347967 • Letter: T
Question
The management of Charlton Corporation is considering the purchase of a new machine costing $475,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability in this situation: Year Income fromOperations Net CashFlow 1 $20,000 $95,000 2 20,000 95,000 3 20,000 95,000 4 20,000 95,000 5 20,000 95,000 The cash payback period for this investment is: a. 5 years b. 4 years c. 3 years d. 20 years The management of Charlton Corporation is considering the purchase of a new machine costing $475,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability in this situation: Year Income fromOperations Net CashFlow 1 $20,000 $95,000 2 20,000 95,000 3 20,000 95,000 4 20,000 95,000 5 20,000 95,000 The cash payback period for this investment is: a. 5 years b. 4 years c. 3 years d. 20 years The management of Charlton Corporation is considering the purchase of a new machine costing $475,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability in this situation: Year Income fromOperations Net CashFlow 1 $20,000 $95,000 2 20,000 95,000 3 20,000 95,000 4 20,000 95,000 5 20,000 95,000 The cash payback period for this investment is: Year Income fromOperations Net CashFlow 1 $20,000 $95,000 2 20,000 95,000 3 20,000 95,000 4 20,000 95,000 5 20,000 95,000Explanation / Answer
4 Years
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