PAYBACK, ACCOUNTING RATE OF RETURN, NET PRESENT VALUE,
INTERNAL RATE OF RETURN
Ripit Company wants to buy a numerically controlled (NC) machine
to be used in producing specially machined parts for manufacturers
of tractors The outlay required is $480,000. The NC equipment will
last five years with no expected salvage value. The expected
after-tax cash flows associated with the project follow:
Year
Cash Revenues Cash Expenses
1
$780,000
$600,000
2
780,000
600,000
3
780,000 ...