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a) What are the payback periods of the machines? of the machines below to be selected. If return of 18% per year is required, answer the following b) Using PW method, which machine is economically better? Why? Initial Investment, $ Machine 1 4,500 Machine 2 7,000 1500 ttt 1,500 (years 1-6) 5 4,000 (years 7-10) 2 10 Annual Net Income, $ 1,550 Life, years 0

a) What are the payback periods of the machines? of the machines below to be selected. If return of 18% per year is required, answer the following b) Using PW method, which machine is economically better? Why? Initial Investment, $ Machine 1 4,500 Machine 2 7,000 1500 ttt 1,500 (years 1-6) 5 4,000 (years 7-10) 2 10 Annual Net Income, $ 1,550 Life, years 0

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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a) What are the payback periods of the machines? of the machines below to be selected. If return of 18% per year is required, answer the following b) Using PW method, which machine is economically better? Why? Initial Investment, $ Machine 1 4,500 Machine 2 7,000 1500 ttt 1,500 (years 1-6) 5 4,000 (years 7-10) 2 10 Annual Net Income, $ 1,550 Life, years 0
Transcribed Image Text:a) What are the payback periods of the machines? of the machines below to be selected. If return of 18% per year is required, answer the following b) Using PW method, which machine is economically better? Why? Initial Investment, $ Machine 1 4,500 Machine 2 7,000 1500 ttt 1,500 (years 1-6) 5 4,000 (years 7-10) 2 10 Annual Net Income, $ 1,550 Life, years 0
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