Ether Inc. is considering an option to buy injection molding machinery and has gathered the following...
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Ether Inc. is considering an option to buy injection molding machinery and has gathered the following information regarding this investment: The initial cost is estimated to be $180,000 and the machinery is expected to have a useful life of 5 years. Ether Inc.requires a minimum rate of return of 8%, and has calculated the following data pertaining to the purchase and operation of this machinery: Estimated Annual Estimated Annual Year Depreciation Cash Inflows Cash Outflows 1 $ 40,000 $8,000 $28,000 $50,000 $18,000 $28,000 $75,000 $22,000 $28,000 $105,000 $35,000 $28,000 5 $110,000 $50,000 $28,000 Determine Ether Inc.'s payback period, accounting rate of return, and NPV for this investment? 2. 3. 4. Ether Inc. is considering an option to buy injection molding machinery and has gathered the following information regarding this investment: The initial cost is estimated to be $180,000 and the machinery is expected to have a useful life of 5 years. Ether Inc.requires a minimum rate of return of 8%, and has calculated the following data pertaining to the purchase and operation of this machinery: Estimated Annual Estimated Annual Year Depreciation Cash Inflows Cash Outflows 1 $ 40,000 $8,000 $28,000 $50,000 $18,000 $28,000 $75,000 $22,000 $28,000 $105,000 $35,000 $28,000 5 $110,000 $50,000 $28,000 Determine Ether Inc.'s payback period, accounting rate of return, and NPV for this investment? 2. 3. 4.
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Managerial Accounting
ISBN: 978-0078111006
14th edition
Authors: Ray Garrison, Eric Noreen and Peter Brewer
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