The rate of earnings is 10% and the cash to be received in four years is $51,647

Question

The rate of earnings is 10% and the cash to be received in four years is $51,647.00. Determine the present value amount, using the following partial table of present value of $1 at compound interest (round to two decimal points).

Select the correct answer.

$35,274.90

Dukes Company is considering the acquisition of a machine that costs $380,889.00. The machine is expected to have a useful life of 6 years, a negligible residual value, an annual cash flow of $88,578.84, and annual operating income of $89,527.00. Determine the estimated cash payback period for the machine (round to one decimal point).

Select the correct answer.

Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636

Explanation / Answer

1 Present value amount = 51647*0.683= 35274.901 Option 4 is correct 2 Estimated cash payback period = 380889/88578.84= 4.3 Option 2 is correct

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

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