Saved A machine can be purchased for $80,000 and used for five years, yielding t

Question

Saved A machine can be purchased for $80,000 and used for five years, yielding the following net incomes. In projecting net in straight-ine depreciation is applied, using a five-year life and a zero salvage value. Year 1 Year 2 Year 3 Year 4 Year 5 Net s payback period (ignore taxes). (Round your intermediate calculations to 3 decimal places and rouid payback period answer to 3 decimal places.) Year Net Income Depreciation Net Cash Flow Cumulative Cash Flow (80.000) (80,000)) S 13.300 35 000 19.900 53.200 up

Explanation / Answer

Compute payback period :

Payback period = 2 Years+29400/51000 = 2.576 Years

Year Net income Depreciation Net cash flow Cumulative cash flow 0 -80000 -80000 1 5300 16000 21300 -58700 2 13300 16000 29300 -29400 3 35000 16000 51000 21600 4 19900 16000 35900 57500 5 53200 16000 69200 126700

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.