LENLEN Company is considering on investing in new automated machinery. The machinery will be used for five years in the project. (Prevailing cost of capital at 10% per annum) The new investment needs a P1,700,000 cash outflow. The estimated cash inflow of income from the investment of machinery for the next five (5) years would be: YEAR CASH INFLOWS 1 P 950,000 750,000 2 650,000 350,000 3 4 5 150,000 REQUIRED: By applying the following evaluation techniques if the investment economically acceptable. Show your complete solution and Answer it if acceptable or not acceptable from 1 to 4 below: 1. Payback period 2. Discounted payback period
LENLEN Company is considering on investing in new automated machinery. The machinery will be used for five years in the project. (Prevailing cost of capital at 10% per annum) The new investment needs a P1,700,000 cash outflow. The estimated cash inflow of income from the investment of machinery for the next five (5) years would be: YEAR CASH INFLOWS 1 P 950,000 750,000 2 650,000 350,000 3 4 5 150,000 REQUIRED: By applying the following evaluation techniques if the investment economically acceptable. Show your complete solution and Answer it if acceptable or not acceptable from 1 to 4 below: 1. Payback period 2. Discounted payback period
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
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![LENLEN Company is considering on investing in new automated machinery.
The machinery will be used for five years in the project. (Prevailing cost of
capital at 10% per annum) The new investment needs a P1,700,000 cash
outflow. The estimated cash inflow of income from the investment of
machinery for the next five (5) years would be:
YEAR
CASH INFLOWS
P 950,000
750,000
2.
650,000
350,000
3
4
150,000
REQUIRED: By applying the following evaluation techniques if the
investment economically acceptable. Show your complete solution and
Answer it if acceptable or not acceptable from 1 to 4 below:
1. Payback period
2. Discounted payback period](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F90e57e2d-251f-4931-abfd-e7794e8b237d%2F324b80b0-1f7d-4bf5-b37a-8d1a7441c578%2F3io9cht_processed.png&w=3840&q=75)
Transcribed Image Text:LENLEN Company is considering on investing in new automated machinery.
The machinery will be used for five years in the project. (Prevailing cost of
capital at 10% per annum) The new investment needs a P1,700,000 cash
outflow. The estimated cash inflow of income from the investment of
machinery for the next five (5) years would be:
YEAR
CASH INFLOWS
P 950,000
750,000
2.
650,000
350,000
3
4
150,000
REQUIRED: By applying the following evaluation techniques if the
investment economically acceptable. Show your complete solution and
Answer it if acceptable or not acceptable from 1 to 4 below:
1. Payback period
2. Discounted payback period
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