Calculate the payback period for keeping the old backhoes and purchasing the new backhoes. Old Backhoes New
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Question:
Calculate the payback period for keeping the old backhoes and purchasing the new backhoes.
Old Backhoes | New Backhoes | ||
Purchase cost when new | $90,000 | $200,000 | |
Salvage value now | $42,000 | ||
Investment in major overhaul needed in next year | $55,000 | ||
Salvage value in 8 years | $15,000 | $90,000 | |
Remaining life | 8 years | 8 years | |
Net cash flow generated each year | $40,425 | $53,900 |
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
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