2A- The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: 1. Determine the payback period of the investment. 2. Would the payback period be affected if the cash inflow in the last year were several times as large? 2B- A piece of laborsaving equipment has just come onto the market that Mitsui Electronics, Ltd., could use to reduce costs in one of its plants in Japan. Relevant data relating to the equipment follow: Required: Compute the payback period for the equipment. If the company requires a payback period of four years or less, would the equipment be purchased?
2A- The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: 1. Determine the payback period of the investment. 2. Would the payback period be affected if the cash inflow in the last year were several times as large? 2B- A piece of laborsaving equipment has just come onto the market that Mitsui Electronics, Ltd., could use to reduce costs in one of its plants in Japan. Relevant data relating to the equipment follow: Required: Compute the payback period for the equipment. If the company requires a payback period of four years or less, would the equipment be purchased?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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2A- The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows:
1. Determine the payback period of the investment.
2. Would the payback period be affected if the
large?
2B- A piece of laborsaving equipment has just come onto the market that Mitsui Electronics, Ltd., could use to reduce costs in one of its plants in Japan. Relevant data relating to the equipment follow:
Required:
Compute the payback period for the equipment. If the company requires a payback period of
four years or less, would the equipment be purchased?
Transcribed Image Text:Purchese cost of the equipmert ..
Annual cost savings that wil be
provided by the equipment..
Life of the equigment .
.
$432,000
$90,000
12 years
Transcribed Image Text:Year
Investment Cash Inflow
$15,000
$ 8,000
$1,000
$2,000
$2,500
$4,000
$5,000
$6,000
$5,000
$4,000
$3,000
$2,000
1.......
2.......
3.
....
4......
5.......
6.......
7......
8.......
9..
10....
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