Payback period
Cost of investment | / | Annual net cash flows | Payback period | |
a | $ 300,000 | / | $ 158,538* | 1.89 years |
b | $ 180,000 | / | $ 63,400** | 2.84 years |
Annual net cash flows = After tax Income + Depreciation
Depreciation = (Cost - Salvage value) / life
a) Depreciation = (300,000-12,000) / 4 = $ 72,000
Annual net cash flows = 86,538 + 72,000 = $ 158,538*
b) Depreciation = (180,000-16,000) / 10 = $ 16,400
Annual net cash flows = 47,000 + 16,400 = $ 63,400**
Compute the payback period for each of these two separate investments: points a. A new operating...
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: a. A new operating system for an existing machine is expected to cost $280,000 and have a useful life of four years. The system yields an incremental after-tax income of $80,769 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 to last ten years, and will generate an after-tax income...
Compute the payback for each of these two separate
investments:
Compute the payback period for each of these two separate investments: a. A new operating system for an existing machine is expected to cost $240,000 and have a useful life of four years. The system yields an incremental after-tax income of $69,230 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $9,000. b. A machine costs $190,000, has a $13,000 salvage value, is expected...
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 $210,000, has a $14,000 salvage value, is expected to last ten years, and will generate an after-tax income of $43,000...
mercise 24-5 Payback period computation; even cash flows LO P1 ampute the payback period for each of these two separate investments: .. A new operating system for an existing machine is expected to cost $280,000 and have a useful life of five years. The system yields an incremental after-tax income of $80,769 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $11,000. . A machine costs $180,000, has a $15,000 salvage value, is expected...
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. 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 $180,000, has a $15,000 salvage value, is expected to last nine years, and will generate an after-tax income of $46,000 per year after straight-line depreciation. Payback Period Choose Numerator:...
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 $270,000 and have a useful life of six 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. b. A machine costs $210,000, has a $14,000 salvage value, is expected...
Saved Exercise 11-5 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 $260,000 and have a useful life of five 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 $200,000, has a $14,000 salvage value, is...