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You have the opportunity to expand your business by purchasing new equipment for $192,000. You expect to incur fixed costs of $99,000 per year to use this new equipment, and you expect to incur variable costs in the amount of approximately 12% of annual revenues. Required i Click the icon to see the Worked Solution. Requirement 1. Calculate the payback period for this investment assuming you will generate $144,000 in cash revenues every year. (Round your answer to two decimal places.) The payback period is years. Required 1. Calculate the payback period for this investment assuming you will generate $144,000 in cash revenues every year. 2. Assume you expect the following revenue stream for this investment: Year 7: $ 145,000 Year 1: $ 87,000 119,000 129,000 Year 2: Year 4: $ 160,000 Year 5: 174,000 Year 6: 181,000 Year 8: 128,000 Year 9: 85,000 Year 3: Based on this estimated revenue stream, what is the payback period for this investment? - X

You have the opportunity to expand your business by purchasing new equipment for $192,000. You expect to incur fixed costs of $99,000 per year to use this new equipment, and you expect to incur variable costs in the amount of approximately 12% of annual revenues. Required i Click the icon to see the Worked Solution. Requirement 1. Calculate the payback period for this investment assuming you will generate $144,000 in cash revenues every year. (Round your answer to two decimal places.) The payback period is years. Required 1. Calculate the payback period for this investment assuming you will generate $144,000 in cash revenues every year. 2. Assume you expect the following revenue stream for this investment: Year 7: $ 145,000 Year 1: $ 87,000 119,000 129,000 Year 2: Year 4: $ 160,000 Year 5: 174,000 Year 6: 181,000 Year 8: 128,000 Year 9: 85,000 Year 3: Based on this estimated revenue stream, what is the payback period for this investment? - X

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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You have the opportunity to expand your business by purchasing new equipment for $192,000. You expect to incur fixed costs of $99,000 per year to use this new equipment, and you expect to incur variable costs in the amount of approximately 12% of annual revenues. Required i Click the icon to see the Worked Solution. Requirement 1. Calculate the payback period for this investment assuming you will generate $144,000 in cash revenues every year. (Round your answer to two decimal places.) The payback period is years. Required C 1. Calculate the payback period for this investment assuming you will generate $144,000 in cash revenues every year. 2. Assume you expect the following revenue stream for this investment: 87,000 119,000 129,000 $ Year 1: Year 2: Year 3: Based on this estimated revenue stream, what is the payback period for this investment? Year 4: $ 160,000 Year 5: 174,000 Year 6: 181,000 Year 7: Year 8: Year 9: $ 145,000 128,000 85,000 - X
Transcribed Image Text:You have the opportunity to expand your business by purchasing new equipment for $192,000. You expect to incur fixed costs of $99,000 per year to use this new equipment, and you expect to incur variable costs in the amount of approximately 12% of annual revenues. Required i Click the icon to see the Worked Solution. Requirement 1. Calculate the payback period for this investment assuming you will generate $144,000 in cash revenues every year. (Round your answer to two decimal places.) The payback period is years. Required C 1. Calculate the payback period for this investment assuming you will generate $144,000 in cash revenues every year. 2. Assume you expect the following revenue stream for this investment: 87,000 119,000 129,000 $ Year 1: Year 2: Year 3: Based on this estimated revenue stream, what is the payback period for this investment? Year 4: $ 160,000 Year 5: 174,000 Year 6: 181,000 Year 7: Year 8: Year 9: $ 145,000 128,000 85,000 - X
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