Terra network is planning to buy injection molding machinery costing 180,000. This machinery's expected useful life 5

Question:

Terra network is planning to buy injection molding machinery costing 180,000. This machinery's expected useful life 5 years. They require a minimum rate of return of 8%, and have calculated the following data pertaining to the purchase and operation of this machinery.

Estimated Annual Cash Outflows Estimated Annual Cash inflows Depreciation Year $40,000 8,000 28,000 18,000 28,000 50,000

Determine payback period ARR NPV.

Payback Period
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...