a. Depreciation = (290000-11000)/5 = $55800
Annual cash inflows = Net income+ depreciation
= 83653+55800 = $139,453
Payback period = Initial investment / annual cash inflows
= 290000/139453 = 2.08 years
b. Depreciation = (180000-15000)/9 = 18333
Annual cash inflows = 46000+18333 = 64333
Payback period = 180000/64333 = 2.80 period
a. A new operating system for an existing machine is expected to cost $290,000 and have...
Exercise 5 a. A new operating system for an existing machine is expected to cost $520,000 and have a useful life of 6 years. The system yields an incremental after-tax income of $150,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000 b. A machine costs $380,000, has a $20,000 salvage value is expected to last 8 years, and will generate an after tax income of $60,000 per year after straight-line depreciation. Compute...
Compute the payback period for each of these two separate investments: A new operating system for an existing machine is expected to cost $270,000 and have a useful life of five years. The system yields an incremental after-tax income of $77,884 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000. A machine costs $180,000, has a $14,000 salvage value, is expected to last nine years, and will generate an after-tax income of $43,000...
Compute the payback period for each of these two separate investments: a. A new operating system for an existing machine is expected to cost $260,000 and have a useful life of four years. The system yields an incremental after-tax income of $75,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000. b. A machine costs $170,000, has a $14,000 salvage value, is expected to last nine years, and will generate an after-tax income...
Compute the payback period for each of these two separate investments: points a. A new operating system for an existing machine is expected to cost $300,000 and have a useful life of four years. The system yields an incremental after-tax income of $86,538 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $12,000. b. A machine costs $180,000, has a $16,000 salvage value, is expected to last ten years, and will generate an after-tax...
Exercise 24-5 Payback period computation; even cash flows LO P1 Compute the payback period for each of these two separate investments: a. A new operating system for an existing machine is expected to cost $290,000 and have a useful life of five years. The system yields an incremental after-tax income of $83,653 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $11,000. b. A machine costs $210,000, has a $15,000 salvage value, is expected...
. A new operating system for an existing machine is expected to cost $730.000 and have a useful life of six years. The system yields an incremental after-tax income of $280,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $22,000. b. A machine costs $510,000, has a $22,400 salvage value, is expected to last eight years, and will generate an after-tax Income of $88,000 per year after straight-line depreciation. Assume the company requires...
a. A new operating system for an existing machine is expected to cost $570,000 and have a useful life of six years. The system yields an incremental after-tax income of $235,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $14,000. b. A machine costs $600,000, has a $34,400 salvage value, is expected to last eight years, and will generate an after-tax income of $78,000 per year after straight-line depreciation Assume the company requires...
a. A new operating system for an existing machine is expected to cost $710,000 and have a useful life of six years. The system yields an incremental after-tax income of $190,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,800. b. A machine costs $450,000, has a $29,300 salvage value, is expected to last eight years, and will generate an after-tax income of $62,000 per year after straight-line depreciation. Assume the company requires...
a. A new operating system for an existing machine is expected to cost $530,000 and have a useful life of six years. The system yields an incremental after-tax income of $235,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $25,200. b. A machine costs $390,000, has a $38,600 salvage value, is expected to last eight years, and will generate an after-tax income of $82,000 per year after straight-line depreciation. Assume the company requires...
a. A new operating system for an existing machine is expected to cost $730.000 and have a useful life of six years. The system yields an incremental after-tax income of $230,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $12,600. b. A machine costs $550,000, has a $31.400 salvage value, is expected to last eight years, and will generate an after-tax income of $82,000 per year after straight-line depreciation. Assume the company requires...