A COMPANY IS CONSIDERING INVESTING IN NEW EQUIPMENT THAT WILL COST THE COMPANY $2,572 AT TIME = 0. THE AFTER- TAX CASH FLOWS ARE EXPECTED TO BE $430 EACH YEAR FOR 14 YEARS. WHAT IS THE PAYBACK PERIOD? ROUND YOUR ANSWER TO TWO DECIMAL POINTS.

Entrepreneurial Finance
6th Edition
ISBN:9781337635653
Author:Leach
Publisher:Leach
Chapter13: Other Financing Alternatives
Section: Chapter Questions
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A company is considering investment in new equipment... Please answer the financial accounting question

A COMPANY IS CONSIDERING INVESTING IN NEW EQUIPMENT
THAT WILL COST THE COMPANY $2,572 AT TIME = 0. THE AFTER-
TAX CASH FLOWS ARE EXPECTED TO BE $430 EACH YEAR FOR
14 YEARS. WHAT IS THE PAYBACK PERIOD? ROUND YOUR
ANSWER TO TWO DECIMAL POINTS.
Transcribed Image Text:A COMPANY IS CONSIDERING INVESTING IN NEW EQUIPMENT THAT WILL COST THE COMPANY $2,572 AT TIME = 0. THE AFTER- TAX CASH FLOWS ARE EXPECTED TO BE $430 EACH YEAR FOR 14 YEARS. WHAT IS THE PAYBACK PERIOD? ROUND YOUR ANSWER TO TWO DECIMAL POINTS.
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