A new machine is expected to produce the following after-tax cash inflows over a period of 5 years: After-tax cash inflows Year Per Year Cumulative 1 16,000 16,000 2 12,000 28,000 3 20,000 48,000 4 8,000 56,000 5 6,000 62,000 1.If the machine will cost P40,000, its payback period is ? 2.

A new machine is expected to produce the following after-tax cash inflows over a period of 5 years: After-tax cash inflows Year Per Year Cumulative 1 16,000 16,000 2 12,000 28,000 3 20,000 48,000 4 8,000 56,000 5 6,000 62,000 1.If the machine will cost P40,000, its payback period is ? 2.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3EA: If a copy center is considering the purchase of a new copy machine with an initial investment cost...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

A new machine is expected to produce the following after-tax cash inflows over a period of 5 years:

	After-tax cash inflows
Year	Per Year	Cumulative
1	16,000	16,000
2	12,000	28,000
3	20,000	48,000
4	8,000	56,000
5	6,000	62,000

1.If the machine will cost P40,000, its payback period is ?

Definition Definition Transfer of funds into a company by any third party, which may happen due to any operational, investing, and financing activities. The cash inflow includes payments made by customers or investments made by the investors into the company by purchasing its equity.

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