ABC Company is looking to invest in some new machinery to replace its current malfunctioning one. The new machine, which costs P420,000, would increase annual revenue by P200,000 and annual cash expenses by P50,000. The machine is estimated to have a useful life of 12 years and P30,000 salvage value. Requirements: 1. Compute for the payback period in years 2. Compute for the payback period reciprocal

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
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ABC Company is looking to invest in some new machinery to replace its
current malfunctioning one. The new machine, which costs P420,000, would
increase annual revenue by P200,000 and annual cash expenses by P50,000.
The machine is estimated to have a useful life of 12 years and P30,000
salvage value.
Requirements:
1. Compute for the payback period in years
2. Compute for the payback period reciprocal
Transcribed Image Text:ABC Company is looking to invest in some new machinery to replace its current malfunctioning one. The new machine, which costs P420,000, would increase annual revenue by P200,000 and annual cash expenses by P50,000. The machine is estimated to have a useful life of 12 years and P30,000 salvage value. Requirements: 1. Compute for the payback period in years 2. Compute for the payback period reciprocal
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