following information has been collected on this investment: Old Equipment Cost Accumulated depreciation Remaining life Current salvage value Salvage value in 8 years Annual cash operating costs $81,040 Cost $40,800 8 years $9,860 $0 $35,900 New Equipment Estimated useful life Salvage value in 8 years Annual cash operating costs $38,000 8 years $4,800 $30,700 Depreciation is $10,130 per year for the old equipment. The straight-line depreciation method would be used for the over an eight-year period with salvage value of $4,800.
following information has been collected on this investment: Old Equipment Cost Accumulated depreciation Remaining life Current salvage value Salvage value in 8 years Annual cash operating costs $81,040 Cost $40,800 8 years $9,860 $0 $35,900 New Equipment Estimated useful life Salvage value in 8 years Annual cash operating costs $38,000 8 years $4,800 $30,700 Depreciation is $10,130 per year for the old equipment. The straight-line depreciation method would be used for the over an eight-year period with salvage value of $4,800.
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
Problem 1PS
Related questions
Question
Please help me with correct answer thanku
Transcribed Image Text:following information has been collected on this investment:
Old Equipment
Cost
Accumulated depreciation
Remaining life
Current salvage value
Salvage value in 8 years
Annual cash operating costs
$81,040
$40,800
8 years
$9,860
(a)
$0
$35,900
Cost
New Equipment
Estimated useful life
Salvage value in 8 years
Annual cash operating costs
$38,000
8 years
$4,800
$30,700
Depreciation is $10,130 per year for the old equipment. The straight-line depreciation method would be used for the new equipr
over an eight-year period with salvage value of $4,800.
Transcribed Image Text:Depreciation is $10,130 per year for the old equipment. The straight-line depreciation method would be used for the new equipment
over an eight-year period with salvage value of $4,800.
(a)
* Your answer is incorrect.
Determine the cash payback period. (Ignore income taxes) (Round answer to 3 decimal places, eg. 15.275)
Cash payback period
eTextbook and Media
5.41 years
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 1 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education