ine will generate 568,000 per year in revenue and the direct o 7. Compute the payback period using only CASH flows.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Dr. Barrett wants to purchase a new plece of equipment for his practice. The equipment can be purchased at a cost of $200,000 and has a useful life of 12 years. He thinks that
the machine will generate $68,000 per year in revenue and the direct operating costs associated with earning this revenue will be $32,000. Depreclation expense per year will be
$16,666.67. Compute the payback period using only CASH flows.
Round your answer to two decimal places and use appropriate units.
Answer
Transcribed Image Text:Dr. Barrett wants to purchase a new plece of equipment for his practice. The equipment can be purchased at a cost of $200,000 and has a useful life of 12 years. He thinks that the machine will generate $68,000 per year in revenue and the direct operating costs associated with earning this revenue will be $32,000. Depreclation expense per year will be $16,666.67. Compute the payback period using only CASH flows. Round your answer to two decimal places and use appropriate units. Answer
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