A company is considering a project with the following characteristics: Cash outflows: Immediate investment in equipment: $489,000 Cash outflow for equipment maintenance in year 2: $55,000 Cash inflows: Cash savings in year 1: $50,000 Cash savings in year 2: $100,000 Cash savings in year 3: $100,000 Cash savings in year 4: $150,000 Cash savings in year 5: $200,000 Salvage value at the end of year 5: $60,000 What is the Payback Period (in years) for this project? (Round your answer to 2 decimal places.) (Use the present values tables above for any present value calculations. Don't round intermediate calculations. Round your final answer to the nearest dollar.)
A company is considering a project with the following characteristics: Cash outflows: Immediate investment in equipment: $489,000 Cash outflow for equipment maintenance in year 2: $55,000 Cash inflows: Cash savings in year 1: $50,000 Cash savings in year 2: $100,000 Cash savings in year 3: $100,000 Cash savings in year 4: $150,000 Cash savings in year 5: $200,000 Salvage value at the end of year 5: $60,000 What is the Payback Period (in years) for this project? (Round your answer to 2 decimal places.) (Use the present values tables above for any present value calculations. Don't round intermediate calculations. Round your final answer to the nearest dollar.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company is considering a project with the following characteristics: Cash outflows: Immediate investment in equipment: $489,000
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