Laundromat is trying to enhance the services it provides to customers, mostly college students. It is looking into the purchase of new high-efficiency washing machines that will allow for the laundry's status to be checked via smartphone.

FulmarFulmar

estimates the cost of the new equipment at

$178,000.

The equipment has a useful life of 9 years.

FulmarFulmar

expects cash fixed costs of

$80,000

per year to operate the new machines, as well as cash variable costs in the amount of

15%

of revenues.

FulmarFulmar

evaluates investments using a cost of capital of

6?%.

Requirement 1. Calculate the payback period and the discounted payback period for this investment, assuming

FulmarFulmar

expects to generate

$ 190 comma 000$190,000

in incremental revenues every year from the new machines. (Round your answer to two decimal? places.)

The payback period for the investment assuming uniform net cash inflows is

years.

Requirements:

1.	Calculate the payback period and the discounted payback period for this investment, assuming FulmarFulmar expects to generate $ 190 comma 000$190,000 in incremental revenues every year from the new machines.
2.	Assume instead that FulmarFulmar expects an uneven stream of incremental cash revenues from installing the new washing machines. Based on this estimated revenue stream, what are the payback and discounted payback periods for the investment?

Year	1	2	3	4	5	6	7	8	9
Projected Revenue	$85,000	$130,000	$140,000	$170,000	$180,000	$170,000	$140,000	$150,000	$185,000

Answer rating: 100% (QA)

1 Cost of Investment 178000 Years 9 years CAsh fixed cost per year 80000 Cash variable cost 15 of ... View the full answer