Question

Safieh Corp. is considering acquiring a manufacturing plant. The purchase price is $2,480,000. The owners believe the plant will generate net cash inflows of $310,000 annually. It will have to be replaced in five years. To be profitable, the investment payback must occur before the investment’s replacement date. Use the payback method to determine whether Safieh should purchase this plant.


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  • CreatedApril 30, 2015
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