Breakeven cash inflows The Sleek Ring Company, a leading producer of fine cast silver jewelry, is...

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Breakeven cash inflows The Sleek Ring Company, a leading producer of fine cast silver jewelry, is considering the puechase of

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Answer 1

Answer #1

Minimum yearly cash flow = Initial Cost/Present Value Annuity Factor

= 696,000/PVAF(12%,12 years)

=696,000/6.194374

=$112,360.02

If required return is 17%, minimum yearly cash flow

= 696,000/PVAF(17%,12 years)

=696,000/5.712779

=$121,832.13

Would increase

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Answer 2

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