Abbey Manufacturing is considering an investment in a new automated manufacturing system. The new system requires an investment of $1,200,000 and either has: a. Even cash flows of $600,000 per year or b. The following expected annual cash flows: $150,000, $150,000, $400,000, $400,000, and $100,000. Required: Calculate the payback period for each case. Round your answer to one decimal place. a. years b. years
Abbey Manufacturing is considering an investment in a new automated manufacturing system. The new system requires an investment of $1,200,000 and either has: a. Even cash flows of $600,000 per year or b. The following expected annual cash flows: $150,000, $150,000, $400,000, $400,000, and $100,000. Required: Calculate the payback period for each case. Round your answer to one decimal place. a. years b. years
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![Payback Period
Abbey Manufacturing is considering an investment in a new automated manufacturing system. The new system requires
an investment of $1,200,000 and either has:
a. Even cash flows of $600,000 per year or
b. The following expected annual cash flows: $150,000, $150,000, $400,000, $400,000, and $100,000.
Required:
Calculate the payback period for each case. Round your answer to one decimal place.
a.
years
b.
years](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9440d08a-4c5e-4464-aab8-31e1fd834277%2F6c2fe44d-a707-4d86-800b-a0b31c00e7bf%2F7q6xfvq_processed.png&w=3840&q=75)
Transcribed Image Text:Payback Period
Abbey Manufacturing is considering an investment in a new automated manufacturing system. The new system requires
an investment of $1,200,000 and either has:
a. Even cash flows of $600,000 per year or
b. The following expected annual cash flows: $150,000, $150,000, $400,000, $400,000, and $100,000.
Required:
Calculate the payback period for each case. Round your answer to one decimal place.
a.
years
b.
years
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