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Problem 24-5A Payback period, break-even time, and net present value LO P1, A1 Sentinel Company is...
Problem 24-5A Payback period, break-even time, and net present value LO P1, A1
Sentinel Company is considering an investment in technology to
improve its operations. The investment will require an initial
outlay of $252,000 and will yield the following expected cash
flows. Management requires investments to have a payback period of
3 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 | $ | 47,300 | ||
| 2 | 52,000 | |||
| 3 | 76,900 | |||
| 4 | 95,100 | |||
| 5 | 125,900 | |||
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.
Determine the payback period for this investment. (Enter cash outflows with a minus sign. Round your Payback Period answer to 1 decimal place.)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Determine the break-even time for this investment. (Enter cash outflows with a minus sign. Round your break-even time answer to 1 decimal place.)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Determine the net present value for this investment.
|
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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