Salsa Company is considering an investment in technology to improve its operations. The investment costs $254,000 and will yield the following net cash flows. Management requires a 8% return on investments (PV of $1. EV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) Year 1 2 Required: Net cash Flow $ 48,200 53,200 75,800 94,500 125,900

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Chapter1: Financial Statements And Business Decisions
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Salsa Company is considering an investment in technology to improve its operations. The investment costs $254,000 and will
yield the following net cash flows. Management requires a 8% return on investments. (PV of $1. FV of $1. PVA of $1, and FVA of
$1) (Use appropriate factor(s) from the tables provided.)
Year
1
2
3
4
5
Net cash Flow
$ 48,200
53,200
75,800
94,500
125,900
Required:
1. Determine the payback period for this investment.
2. Determine the break-even time for this investment.
3. Determine the net present value for this investment.
Transcribed Image Text:Salsa Company is considering an investment in technology to improve its operations. The investment costs $254,000 and will yield the following net cash flows. Management requires a 8% return on investments. (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Year 1 2 3 4 5 Net cash Flow $ 48,200 53,200 75,800 94,500 125,900 Required: 1. Determine the payback period for this investment. 2. Determine the break-even time for this investment. 3. Determine the net present value for this investment.
Determine the payback period for this investment. (Enter cash outflows with a minus sign. Round your Payback Period answer
to 1 decimal place.)
Year
Initial investment
Year 1
Year 2
Year 3
Year 4
Year 5
Payback period-
Required 1
Year
Required 2
Net Cash Flows Cumulative Net Cash
Flows
$
Initial investment
Year 1
Year 2
Year 3
Year 4
Year 5
Break-even time
(254,000)
48,200
53,200
75,800
94,500
125,900
Determine the break-even time for this investment. (Enter cash outflows with a minus sign. Round your break-even time
answer to 1 decimal place.)
Required 3
$
Net Cash Flows
(254,000)
(Required 1
Present Value of Present Value of Net
1 at 8% Cash Flows per Year
years
< Required 1
2. Determine the break-even time for this investment.
3. Determine the net present value for this investment.
Required 1 Required 2 Required 3
Required 2 >
Determine the net present value for this investment.
Net present value
Complete this question by entering your answers in the tabs below.
< Required 2
Cumulative
Present Value of
Net Cash Flows
Required 3 >
Required 4 >
Transcribed Image Text:Determine the payback period for this investment. (Enter cash outflows with a minus sign. Round your Payback Period answer to 1 decimal place.) Year Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Payback period- Required 1 Year Required 2 Net Cash Flows Cumulative Net Cash Flows $ Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Break-even time (254,000) 48,200 53,200 75,800 94,500 125,900 Determine the break-even time for this investment. (Enter cash outflows with a minus sign. Round your break-even time answer to 1 decimal place.) Required 3 $ Net Cash Flows (254,000) (Required 1 Present Value of Present Value of Net 1 at 8% Cash Flows per Year years < Required 1 2. Determine the break-even time for this investment. 3. Determine the net present value for this investment. Required 1 Required 2 Required 3 Required 2 > Determine the net present value for this investment. Net present value Complete this question by entering your answers in the tabs below. < Required 2 Cumulative Present Value of Net Cash Flows Required 3 > Required 4 >
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