NITIAL COST R100 000 R110 000 EXPECTED ECONOMIC LIFE 5 YEARS 5 YEARS EXPECTED DISPOSAL/RESIDUAL VALUE R10 000 EXPECTED NET CASH INFLOWS R R END OF: YEAR 1 34 000 33 000 YEAR 2 27 000 33 000 YEAR 3 32 000 33 000 YEAR 4 30 000 33 000 YEAR 5 26 000 33 000 DEPRECIATION PER YEAR 18 000 22 000 COMPANY ESTIMATES COST CAPITAL = 14% 1) Calculate the payback period for Machine A and B (answers must be expressed in years, months and days).
NITIAL COST R100 000 R110 000 EXPECTED ECONOMIC LIFE 5 YEARS 5 YEARS EXPECTED DISPOSAL/RESIDUAL VALUE R10 000 EXPECTED NET CASH INFLOWS R R END OF: YEAR 1 34 000 33 000 YEAR 2 27 000 33 000 YEAR 3 32 000 33 000 YEAR 4 30 000 33 000 YEAR 5 26 000 33 000 DEPRECIATION PER YEAR 18 000 22 000 COMPANY ESTIMATES COST CAPITAL = 14% 1) Calculate the payback period for Machine A and B (answers must be expressed in years, months and days).
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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Question
MACHINE A | MACHINE B | |
INITIAL COST | R100 000 | R110 000 |
EXPECTED ECONOMIC LIFE | 5 YEARS | 5 YEARS |
EXPECTED DISPOSAL/RESIDUAL VALUE | R10 000 | |
EXPECTED NET |
R | R |
END OF: YEAR 1 | 34 000 | 33 000 |
YEAR 2 | 27 000 | 33 000 |
YEAR 3 | 32 000 | 33 000 |
YEAR 4 | 30 000 | 33 000 |
YEAR 5 | 26 000 | 33 000 |
18 000 | 22 000 | |
COMPANY ESTIMATES COST CAPITAL = 14% |
1) Calculate the payback period for Machine A and B (answers must be expressed in years, months
and days).
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