Pina Colada Manufacturing Company is considering three new projects, each requiring an equipment investment of $25,600. Each project will last for 3 years and produce the following cash flows. Year 1 2 3 Total AA BB $8,200 $11,100 $12,200 11,200 10,200 $33,600 (a) 10,200 16,200 $34,600 11,100 11,100 Payback period CC $33,300 The salvage value for each of the projects is zero. Pina Colada uses straight-line depreciation. Pina Colada will not accept any project with a payback period over 2.2 years. Pina Colada's minimum required rate of return is 12%. Click here to view PV tables. Compute each project's payback period. (Round answers to 2 decimal places, e.g. 52.75.) AA years 88 years CC years

Pina Colada Manufacturing Company is considering three new projects, each requiring an equipment investment of $25,600. Each project will last for 3 years and produce the following cash flows. Year 1 2 3 Total AA BB $8,200 $11,100 $12,200 11,200 10,200 $33,600 (a) 10,200 16,200 $34,600 11,100 11,100 Payback period CC $33,300 The salvage value for each of the projects is zero. Pina Colada uses straight-line depreciation. Pina Colada will not accept any project with a payback period over 2.2 years. Pina Colada's minimum required rate of return is 12%. Click here to view PV tables. Compute each project's payback period. (Round answers to 2 decimal places, e.g. 52.75.) AA years 88 years CC years

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 18EA: Consolidated Aluminum is considering the purchase of a new machine that will cost $308,000 and...

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