Question
In: Accounting
Sentinel Company is considering an investment in technology to improve its operations. The investment will require...
Sentinel Company is considering an investment in technology to
improve its operations. The investment will require an initial
outlay of $245,000 and will yield the following expected cash
flows. Management requires investments to have a payback period of
4 years, and it requires a 8% return on investments. (PV of $1, FV
of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s)
from the table provided.)
| Period | Cash Flow | |||
| 1 | $ | 47,900 | ||
| 2 | 52,800 | |||
| 3 | 76,000 | |||
| 4 | 94,100 | |||
| 5 | 126,600 | |||
Required:
1. Determine the payback period for this
investment.
2. Determine the break-even time for this
investment.
3. Determine the net present value for this
investment.
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Solutions
ekkarill92 answered 1 year agoRelated Solutions
Sentinel Company is considering an investment in technology to improve its operations. The investment will require...
Sentinel Company is considering an investment in technology to
improve its operations. The investment will require an initial
outlay of $257,000 and will yield the following expected cash
flows. Management requires investments to have a payback period of
3 years, and it requires a 9% return on investments. (PV of $1, FV
of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s)
from the table provided.)
Period
Cash Flow
1
$
47,400
2
52,300
3
75,600
4
94,800...
Sentinel Company is considering an investment in technology to improve its operations. The investment will require...
Sentinel Company is considering an investment in technology to
improve its operations. The investment will require an initial
outlay of $257,000 and will yield the following expected cash
flows. Management requires investments to have a payback period of
3 years, and it requires a 9% return on investments. (PV of $1, FV
of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s)
from the table provided.)
Period
Cash Flow
1
$
47,400
2
52,300
3
75,600
4
94,800...
Sentinel Company is considering an investment in technology to improve its operations. The investment will require...
Sentinel Company is considering an investment in technology to
improve its operations. The investment will require an initial
outlay of $247,000 and will yield the following expected cash
flows. Management requires investments to have a payback period of
2 years, and it requires a 10% return on investments. (PV of $1, FV
of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from
the table provided.) Period Cash Flow 1 $ 48,200 2 53,200 3 75,900
4 94,600...
Sentinel Company is considering an investment in technology to improve its operations. The investment will require...
Sentinel Company is considering an investment in technology to
improve its operations. The investment will require an initial
outlay of $247,000 and will yield the following expected cash
flows. Management requires investments to have a payback period of
2 years, and it requires a 10% return on investments. (PV of $1, FV
of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s)
from the table provided.)
Period
Cash Flow
1
$
48,200
2
53,200
3
75,900
4
94,600...
Sentinel Company is considering an investment in technology to improve its operations. The investment will require...
Sentinel Company is considering an investment in technology to
improve its operations. The investment will require an initial
outlay of $245,000 and will yield the following expected cash
flows. Management requires investments to have a payback period of
3 years, and it requires a 8% return on investments. (PV of $1, FV
of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from
the table provided.) Period Cash Flow 1 $ 47,500 2 52,100 3 75,800
4 94,500...
Sentinel Company is considering an investment in technology to improve its operations. The investment will require...
Sentinel Company is considering an investment in technology to
improve its operations. The investment will require an initial
outlay of $247,000 and will yield the following expected cash
flows. Management requires investments to have a payback period of
2 years, and it requires a 10% return on investments. (PV of $1, FV
of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from
the table provided.) Period Cash Flow 1 $ 48,200 2 53,200 3 75,900
4 94,600...
Sentinel Company is considering an investment in technology to improve its operations. The investment will require...
Sentinel Company is considering an investment in technology to
improve its operations. The investment will require an initial
outlay of $259,000 and will yield the following expected cash
flows. Management requires investments to have a payback period of
3 years, and it requires a 9% return on investments. (PV of $1, FV
of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s)
from the table provided.)
Period
Cash Flow
1
$
48,500
2
52,300
3
76,100
4
95,600...
Sentinel Company is considering an investment in technology to improve its operations. The investment will require...
Sentinel Company is considering an investment in technology to
improve its operations. The investment will require an initial
outlay of $257,000 and will yield the following expected cash
flows. Management requires investments to have a payback period of
3 years, and it requires a 8% return on investments. (PV of $1, FV
of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s)
from the table provided.)
Period
Cash Flow
1
$
48,500
2
52,900
3
75,900
4
94,700...
Lenitnes Company is considering an investment in technology to improve its operations. The investment will require...
Lenitnes Company is considering an investment in technology to
improve its operations. The investment will require an initial
outlay of $266,000 and will yield the following expected cash
flows. Management requires investments to have a payback period of
2 years, and it requires a 10% return on its investments. (PV of
$1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate
factor(s) from the table provided.)
Period
Cash Flow
1
$
123,900
2
92,200
3
70,600...
ACME Manufacturing in investing in new technology to improve the productivity of its operations which is...
ACME Manufacturing in investing in new technology to improve the
productivity of its operations which is estimated to produce yearly
savings of $45,000. To achieve this, ACME will need to undertake
upfront capital investment of $100,000 and $25,000 in net working
capital. The equipment will be depreciated on a straight-line basis
over 3 years. The working capital is expected to be recovered at
the end of year three. The new equipment is estimated to have a
salvage value of $50,000...
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