Cowboy Recording Studio is considering the investment of $280000 in new recording equipment. It is estimated that

Question:

Cowboy Recording Studio is considering the investment of $280000 in new recording equipment. It is estimated that the new equipment will generate additional cash flow of $42,000 per year for each year of its 10-year life and will have a of $30000 at the end of its life.
Cowboys' financial managers estimate that the firm's is 10%.
Required:
a. Calculate the of the investment.
b. Calculate the present value ratio of the investment.
c. What is the of this investment, relative to the Calculate the of the investment.
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