Diamond Company is considering investing in new equipment that will cost $1,400,000 with a 10-year useful life. The new equipment is expected to produce annual net income of $90,000 over its useful life. Depreciation expense, using the straight-line rate,

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Diamond Company is considering investing in new equipment that will cost $1,400,000 with a 10-year useful life. The new equipment is expected to produce annual net income of $90,000 over its useful life. Depreciation expense, using the straight-line rate,

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Answer 1

Answer #1

Please find below table useful to compute desired results: -

A B 1 Initial Investment 1400000 2 Net Operating Income 90000 3 Depreciation 140000 4 Net Annual Cash Inflow =B2+B3 5 Payback

End results would be as follows: -

A 1 Initial Investment 2 Net Operating Income 3 Depreciation 4 Net Annual Cash Inflow 5 Payback Period B 1.400,000.0 90,000.0

answered by: ANURANJAN SARSAM

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Answer 2

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Diamond Company is considering investing in new equipment that will cost $1,400,000 with a 10-year useful life. The new equipment is expected to produce annual net income of $90,000 over its useful life. Depreciation expense, using the straight-line rate,

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Diamond Company is considering investing in new equipment that will cost $1,400,000 with a 10-year useful life. The new equipment is expected to produce annual net income of $90,000 over its useful life. Depreciation expense, using the straight-line rate,