Company is planning to purchase an new machine for the amount of P90,000, with an estimated useful life of 5 years and a salvage value of P10,000. The machine will be depreciated using the straight line method. The machine is expected to produce cash flows from operations, net of income taxes of P36,000 a year in the next 5 years. The machine's salvage value is P20,000 in years 1 and 2 and P15,000 in years 3 and 4. What will be the bailout period for the new machine? A. 1.4 years B. 2.2 years C. 1.9 years D. 3.4 years
Company is planning to purchase an new machine for the amount of P90,000, with an estimated useful life of 5 years and a salvage value of P10,000. The machine will be depreciated using the straight line method. The machine is expected to produce cash flows from operations, net of income taxes of P36,000 a year in the next 5 years. The machine's salvage value is P20,000 in years 1 and 2 and P15,000 in years 3 and 4. What will be the bailout period for the new machine? A. 1.4 years B. 2.2 years C. 1.9 years D. 3.4 years
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter12: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 10P: Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6...
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Lexus Company is planning to purchase an new machine for the amount of P90,000, with an estimated useful life of 5 years and a salvage value of P10,000. The machine will be depreciated using the
A. 1.4 years
B. 2.2 years
C. 1.9 years
D. 3.4 years
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