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Wright Corp. is considering the purchase of a new piece of equipment, which would have an initial cost of $1,000,000 and a 5-year life. There is no salvage value for the equipment. The increase in cash flow each year of the equipment's life would be as follows: $ 392,000 $ 367,000 $ 302,000 $ 247,000 $ 202,000 Year 1 Year 2 Year 3 Year 4 Year 5 What is the payback period? Multiple Choice 2.23 years 2.80 years 2.84 years

Wright Corp. is considering the purchase of a new piece of equipment, which would have an initial cost of $1,000,000 and a 5-year life. There is no salvage value for the equipment. The increase in cash flow each year of the equipment's life would be as follows: $ 392,000 $ 367,000 $ 302,000 $ 247,000 $ 202,000 Year 1 Year 2 Year 3 Year 4 Year 5 What is the payback period? Multiple Choice 2.23 years 2.80 years 2.84 years

FINANCIAL ACCOUNTING
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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Wright Corp. is considering the purchase of a new piece of equipment, which would have an initial cost of $1,000,000 and a 5-year life. There is no salvage value for the equipment. The increase in cash flow each year of the equipment's life would be as follows: $ 392,000 $ 367,000 $ 302,000 $ 247,000 $ 202,000 Year 1 Year 2 Year 3 Year 4 Year 5 What is the payback period? Multiple Choice 2.23 years 2.80 years 2.84 years 3.35 years
Transcribed Image Text:Wright Corp. is considering the purchase of a new piece of equipment, which would have an initial cost of $1,000,000 and a 5-year life. There is no salvage value for the equipment. The increase in cash flow each year of the equipment's life would be as follows: $ 392,000 $ 367,000 $ 302,000 $ 247,000 $ 202,000 Year 1 Year 2 Year 3 Year 4 Year 5 What is the payback period? Multiple Choice 2.23 years 2.80 years 2.84 years 3.35 years
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