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Tamarisk Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment: Old Equipment Cost Accumulated depreciation Remaining life Current salvage value Salvage value in 8 years Annual cash operating costs (a) $80,400 $40,500 8 years $10.280 $0 Cash payback period $35.800 Cost New Equipment Estimated useful life Salvage value in 8 years Annual cash operating costs Depreciation is $10,050 per year for the old equipment. The straight-line depreciation method would be used for the new equipment over an eight-year period with salvage value of $4,800. $40,800 8 years $4,800 $29,600 Determine the cash payback period. (Ignore income taxes) (Round answer to 3 decimal places, eg 15.275) years

Tamarisk Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment: Old Equipment Cost Accumulated depreciation Remaining life Current salvage value Salvage value in 8 years Annual cash operating costs (a) $80,400 $40,500 8 years $10.280 $0 Cash payback period $35.800 Cost New Equipment Estimated useful life Salvage value in 8 years Annual cash operating costs Depreciation is $10,050 per year for the old equipment. The straight-line depreciation method would be used for the new equipment over an eight-year period with salvage value of $4,800. $40,800 8 years $4,800 $29,600 Determine the cash payback period. (Ignore income taxes) (Round answer to 3 decimal places, eg 15.275) years

Financial Accounting: The Impact on Decision Makers
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles
Section: Chapter Questions
Problem 8.6DC
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View Policies Current Attempt in Progress Tamarisk Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment: Cost Old Equipment Accumulated depreciation Remaining life Current salvage value Salvage value in 8 years Annual cash operating costs (a) $80,400 $40,500 8 years $10.280 Cash payback period $0 eTextbook and Media Save for Later $35,800 Cost New Equipment Depreciation is $10,050 per year for the old equipment. The straight-line depreciation method would be used for the new equipment over an eight-year period with salvage value of $4,800. Estimated useful life Salvage value in 8 years Annual cash operating costs Determine the cash payback period. (Ignore income taxes) (Round answer to 3 decimal places, eg 15.275) $40,800 8 years $4,800 $29,600 years Attempts: 0 of 3 used Submit Answer
Transcribed Image Text:View Policies Current Attempt in Progress Tamarisk Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment: Cost Old Equipment Accumulated depreciation Remaining life Current salvage value Salvage value in 8 years Annual cash operating costs (a) $80,400 $40,500 8 years $10.280 Cash payback period $0 eTextbook and Media Save for Later $35,800 Cost New Equipment Depreciation is $10,050 per year for the old equipment. The straight-line depreciation method would be used for the new equipment over an eight-year period with salvage value of $4,800. Estimated useful life Salvage value in 8 years Annual cash operating costs Determine the cash payback period. (Ignore income taxes) (Round answer to 3 decimal places, eg 15.275) $40,800 8 years $4,800 $29,600 years Attempts: 0 of 3 used Submit Answer
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