Pizza Pizazz is considering purchasing a new pizza oven that will speed up cooking time and save costs. The oven costs $180,000 and will last 5 years. It should increase net operating income by $14,000 year and will be depreciated using the straight-line method. The old pizza oven will be traded in and has a salvage value of $20,000. The payback period for the new oven is: Read about this X Sorry, your answer is incorrect, 12.8 years Missed! 3.2 years $180,000/5 = $36,000 depreciation + $14,000 net operating income = $50,0000 cash flow. ($180,000 - $20,000)/$50,000 = 3.2 years %3D %3D 3.6 years X 11.4 years $180,000/5 = $36,000 depreciation + $14,000 net operating income = $50,000 cash flow. ($180.00O - $20.00OV$50.000 = 3.2 vears

Pizza Pizazz is considering purchasing a new pizza oven that will speed up cooking time and save costs. The oven costs $180,000 and will last 5 years. It should increase net operating income by $14,000 year and will be depreciated using the straight-line method. The old pizza oven will be traded in and has a salvage value of $20,000. The payback period for the new oven is: Read about this X Sorry, your answer is incorrect, 12.8 years Missed! 3.2 years $180,000/5 = $36,000 depreciation + $14,000 net operating income = $50,0000 cash flow. ($180,000 - $20,000)/$50,000 = 3.2 years %3D %3D 3.6 years X 11.4 years $180,000/5 = $36,000 depreciation + $14,000 net operating income = $50,000 cash flow. ($180.00O - $20.00OV$50.000 = 3.2 vears

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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