Roberts Company is considering an investment in equipment that is capable of producing more efficiently than the current technology. The outlay required is $2,166,667. The equipment is expected to last five years and will have no salvage value. The expected cash flows associated with the project are as follows: Year Cash Revenues Cash Expenses 1 $2,950,000 $2,300,000 2 2,950,000 2,300,000 3 2,950,000 2,300,000 4 2,950,000 2,300,000 5 2,950,000 2,300,000 The present value tables provided in Exhibit 19B.1 and Exhibit 19B.2 must be used to solve the following problems.
Roberts Company is considering an investment in equipment that is capable of producing more efficiently than the current technology. The outlay required is $2,166,667. The equipment is expected to last five years and will have no salvage value. The expected cash flows associated with the project are as follows:
| Year | Cash Revenues | Cash Expenses |
| 1 | $2,950,000 | $2,300,000 |
| 2 | 2,950,000 | 2,300,000 |
| 3 | 2,950,000 | 2,300,000 |
| 4 | 2,950,000 | 2,300,000 |
| 5 | 2,950,000 | 2,300,000 |
The
Required:
1. Compute the project’s payback period. If required, round your answer to two decimal places.
fill in the blank 1 years
2. Compute the project’s accounting
fill in the blank 2 %
3. Compute the project’s
$fill in the blank 3
4. Compute the project’s
Between fill in the blank 4 % and fill in the blank 5 %
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