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    shellycostello's Avatar
    shellycostello Posts: 1, Reputation: 1
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    #1

    May 6, 2014, 03:03 PM
    Managerial accounting
    Pearl Manufacturing is considering an investment in equipment costing $480,000. The equipment will be depreciated on a straight-line basis over a five-year period with an estimated residual value of $120,000. The expected net cash inflows from the investment are:
    Year 1... $70,000
    Year 2... $80,000
    Year 3... $120,000
    Year 4... $120,000
    Year 5... $120,000
    Total $510,000

    Calculate the payback period for this investment.
    ma0641's Avatar
    ma0641 Posts: 15,680, Reputation: 1012
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    #2

    May 6, 2014, 07:57 PM
    This is homework and we will not do it for you. TIP What is the cost over 5 years? What is the profit over 5 years? Where does the profit start?

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