田 Sentinel Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $253,000 and will yield the following expected cash flows. Management requires investments to have a payback period of 3 years, and it requires an 8% return on investments. Period Cash Flow 1 $47,400 2 $53,900 3 $76,900 4 $95,400 5 $125,400 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.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 6EB: The management of Ryland International Is considering Investing in a new facility and the following...
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Sentinel Company is considering an investment in technology to improve its
operations. The investment will require an initial outlay of $253,000 and will yield the
following expected cash flows. Management requires investments to have a payback
period of 3 years, and it requires an 8% return on investments.
Period Cash Flow
1
$47,400
2
$53,900
3
$76,900
4
$95,400
5
$125,400
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:田 Sentinel Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $253,000 and will yield the following expected cash flows. Management requires investments to have a payback period of 3 years, and it requires an 8% return on investments. Period Cash Flow 1 $47,400 2 $53,900 3 $76,900 4 $95,400 5 $125,400 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.
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