Question: Jubilee Products is considering acquiring a manufacturing plant The purchase
Jubilee Products is considering acquiring a manufacturing plant. The purchase price is $ 1,600,000. The owners believe the plant will generate net cash inflows of $ 320,000 annually. It will have to be replaced in six years. To be profitable, the investment payback must occur before the investment’s replacement date. Use the payback method to deter-mine whether Jubilee should purchase this plant.
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