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Salsa Company is considering an investment in technology to improve its operations. The investment costs $241,000 and will yield the following net cash flows. Management requires a 9% return on investments. (PV of $1. FV of $1. PVA of $1, and EVA of $1) Note: Use appropriate factor(s) from the tables provided. Year 1 2 3 4 5 Net cash Flow $ 48,900 52,300 76,300 96,000 126,700. 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. 4. Should management invest in this project based on net present value?

Salsa Company is considering an investment in technology to improve its operations. The investment costs $241,000 and will yield the following net cash flows. Management requires a 9% return on investments. (PV of $1. FV of $1. PVA of $1, and EVA of $1) Note: Use appropriate factor(s) from the tables provided. Year 1 2 3 4 5 Net cash Flow $ 48,900 52,300 76,300 96,000 126,700. 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. 4. Should management invest in this project based on net present value?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Required a Required 2 Determine the payback period for this investment. Note: Enter cash outflows with a minus sign. Round your Payback Period answer to 1 decimal place. Intial investment Year 1 Year 2 Year 3 Year 4 Year 5 Payback period Year <- req 1 Year 1 2 3 5 Not Cash Flows Cumulative Net Cash Flows $ (241,000) $ 48,900 $ Required 3 Required 1 Net cash Flow $ 48,900 52,300 76,300 96,000 126,700 52,300 76,300 96,000 126,700 159,200 40 years Show Transcribed Text Salsa Company is considering an investment in technology to improve its operations. The investment costs $241,000 and will yield the following net cash flows. Management requires a 9% return on investments. (PV of $1. EV of $1. PVA of $1, and EVA of $1) Note: Use appropriate factor(s) from the tables provided. Required 4 Required 2 (241,000) 489,000 101,200 177,500 273,500 400,200 Required: 1. Determine the payback period for this investment 2. Determine the break-even time for this investment. $ < Required 1 3. Determine the net present value for this investment 4. Should management invest in this project based on net present velue? Complete this question by entering your answers in the tabs below. Required 3 Required 2 > Required 4 Determine the net present value for this investment. Net present value 56,029 < Required 2 C Required 4 >
Transcribed Image Text:Required a Required 2 Determine the payback period for this investment. Note: Enter cash outflows with a minus sign. Round your Payback Period answer to 1 decimal place. Intial investment Year 1 Year 2 Year 3 Year 4 Year 5 Payback period Year <- req 1 Year 1 2 3 5 Not Cash Flows Cumulative Net Cash Flows $ (241,000) $ 48,900 $ Required 3 Required 1 Net cash Flow $ 48,900 52,300 76,300 96,000 126,700 52,300 76,300 96,000 126,700 159,200 40 years Show Transcribed Text Salsa Company is considering an investment in technology to improve its operations. The investment costs $241,000 and will yield the following net cash flows. Management requires a 9% return on investments. (PV of $1. EV of $1. PVA of $1, and EVA of $1) Note: Use appropriate factor(s) from the tables provided. Required 4 Required 2 (241,000) 489,000 101,200 177,500 273,500 400,200 Required: 1. Determine the payback period for this investment 2. Determine the break-even time for this investment. $ < Required 1 3. Determine the net present value for this investment 4. Should management invest in this project based on net present velue? Complete this question by entering your answers in the tabs below. Required 3 Required 2 > Required 4 Determine the net present value for this investment. Net present value 56,029 < Required 2 C Required 4 >
Salsa Company is considering an investment in technology to improve its operations. The investment costs $241,000 and will yield the following net cash flows. Management requires a 9% return on investments. (PV of $1. FV of $1. PVA of $1, and EVA of $1) Note: Use appropriate factor(s) from the tables provided. Year 1 2 3 4 5 Net cash Flow $ 48,900 52,300 76,300 Required: 1. Determine the payback period for this investment. 2. Determine the break-even time for this investment. 96,000 126,700 3. Determine the net present value for this investment. 4. Should management invest in this project based on net present value? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Year Determine the break-even time for this investment. Note: Enter cash outflows with a minus sign. Round your break-even time Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Break-even time= Required 3 Net Cash Flows $ Required 4 (241,000) 48,900 52,300 76,300 96,000 126,700 Present Value of Present Value of Net Cash Flows per Year 1 at 9% 4.9 years answer to 1 decimal place. Present Value of Cumulative Net Cash Flows < Required 1 Required 3 > 44,954 44,954 44,954 44,954 44,954
Transcribed Image Text:Salsa Company is considering an investment in technology to improve its operations. The investment costs $241,000 and will yield the following net cash flows. Management requires a 9% return on investments. (PV of $1. FV of $1. PVA of $1, and EVA of $1) Note: Use appropriate factor(s) from the tables provided. Year 1 2 3 4 5 Net cash Flow $ 48,900 52,300 76,300 Required: 1. Determine the payback period for this investment. 2. Determine the break-even time for this investment. 96,000 126,700 3. Determine the net present value for this investment. 4. Should management invest in this project based on net present value? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Year Determine the break-even time for this investment. Note: Enter cash outflows with a minus sign. Round your break-even time Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Break-even time= Required 3 Net Cash Flows $ Required 4 (241,000) 48,900 52,300 76,300 96,000 126,700 Present Value of Present Value of Net Cash Flows per Year 1 at 9% 4.9 years answer to 1 decimal place. Present Value of Cumulative Net Cash Flows < Required 1 Required 3 > 44,954 44,954 44,954 44,954 44,954
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