Question: Is it possible to find payback without tax for these set of numbers? payback period = initial invest/annual cash flow Alternative 1 Alternative 2 Alternative
Is it possible to find payback without tax for these set of numbers?
| payback period = initial invest/annual cash flow |
| Alternative 1 | Alternative 2 | Alternative 3 | |
| Cost of New Machine | $2,000,000 | $3,500,000 | $3,200,000 |
| Estimated Useful Life | 10 years | 9 years | 8 years |
| Operating Costs each year | $100,000 | $225,000 | $90,000 |
| Warranty covers years 1-4 | ------ | ------ | ------ |
| Maintenance Years 5-10 | $20,000 | $50,000 | $60,000 |
| Training for employees | $10,000 | $0 | $20,000 |
| Expected revenues generated years 1-3 | $500,000 | $550,000 | $450,000 |
| Expected revenues generated years 4-6 | $400,000 | $400,000 | $300,000 |
| Expected revenues generated years 7-10 | $250,000 | $250,000 | $200,000 |
| Estimated Salvage Value | $30,000 | $40,000 | $20,000 |
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