The management of XYZ Beverage Company is considering to purchase a new equipment to increase the production and revenues. The useful life of the equipment is 10 years. Initial cost of equipment is $30.000. Expected annual çash flows from new equipment is 75.000. Annual cash Outflows are = Cost of ingredients: $45,000 ; Salaries expenses: $13,500; Maihtenance expenses: $1,500. Depreciation expense: $5,000. In that case what is payback time (as years) for this equipment? O A) 2,0 170 O B) 3,5 O C) 5,0 OD) 4,0 O E) 3,0
The management of XYZ Beverage Company is considering to purchase a new equipment to increase the production and revenues. The useful life of the equipment is 10 years. Initial cost of equipment is $30.000. Expected annual çash flows from new equipment is 75.000. Annual cash Outflows are = Cost of ingredients: $45,000 ; Salaries expenses: $13,500; Maihtenance expenses: $1,500. Depreciation expense: $5,000. In that case what is payback time (as years) for this equipment? O A) 2,0 170 O B) 3,5 O C) 5,0 OD) 4,0 O E) 3,0
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 18EB: Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the...
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