A company is considering the purchase of a new machine for P480,000. Management predicts that the machine can produce sales of P180,000 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling P120,000 per year including depreciation of P30,000 per year. The company's tax rate is 40%. What is the payback period for the new machine?
A company is considering the purchase of a new machine for P480,000. Management predicts that the machine can produce sales of P180,000 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling P120,000 per year including depreciation of P30,000 per year. The company's tax rate is 40%. What is the payback period for the new machine?
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
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A company is considering the purchase of a new machine for P480,000. Management predicts that the machine can produce sales of P180,000 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling P120,000 per year including
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