MNO company is evaluating a proposal for purchase of equipment which will cost $180,000. The cash inflows from the use of equipment is given below: Year Cash flow S60,000 $40,000 S70,000 $125,000 S35,000 1 2 4 Payback period for the proposal is: а. 3 years b. 2 years с. 4 years d. 3.08 years

MNO company is evaluating a proposal for purchase of equipment which will cost $180,000. The cash inflows from the use of equipment is given below: Year Cash flow S60,000 $40,000 S70,000 $125,000 S35,000 1 2 4 Payback period for the proposal is: а. 3 years b. 2 years с. 4 years d. 3.08 years

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 19E

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Question

MNO company is evaluating a proposal for purchase of equipment which will cost
$180,000. The cash inflows from the use of equipment is given below:
Year
Cash flow
$60,000
$40,000
S70,000
$125,000
$35,000
1
3
4
Payback period for the proposal is:
а. 3 years
b. 2 years
c. 4 years
d. 3.08 years

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