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This question is based on the following information: Sphinx Company is planning to invest in a machinery costing P 500,000 with an estimated useful life of 5 years with no salvage value. The use of this machinery will generate cash savings of P 175,000 before taxes. Income taxes are 20% each year, What is the payback reciprocal? 32% P 33% 34% 35% What is the payback period? 3.125 years 3.152 years 3.512 years 3,521 years

This question is based on the following information: Sphinx Company is planning to invest in a machinery costing P 500,000 with an estimated useful life of 5 years with no salvage value. The use of this machinery will generate cash savings of P 175,000 before taxes. Income taxes are 20% each year, What is the payback reciprocal? 32% P 33% 34% 35% What is the payback period? 3.125 years 3.152 years 3.512 years 3,521 years

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 5P
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This question is based on the following information: Sphinx Company is planning to invest in a machinery costing P 500,000 with an estimated useful life of 5 years with no salvage value. The use of this machinery will generate cash savings of P 175,000 before taxes. Income taxes are 20% each year,

What is the payback reciprocal?

  1. 32%
  2. P 33%
  3. 34%
  4. 35%

    What is the payback period?

    1. 3.125 years
    2. 3.152 years
    3. 3.512 years
    4. 3,521 years
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