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The management of XYZ Beverage Company is considering to purchase a new equipment to increase the production and revenues. The the equipment is 10 years. Initial cost of equipment is $30.000. Expected annual cash flows from new equipment is 75.000. Annual cash : Cost of ingredients: $45,000; Salaries expenses: $13,500; Maintenance expenses: $1,500. Depreciation expense: $5,000. In that case wh= time (as years) for this equipment? A) 3,0 O B) 2,0 OC) 5,0

The management of XYZ Beverage Company is considering to purchase a new equipment to increase the production and revenues. The the equipment is 10 years. Initial cost of equipment is $30.000. Expected annual cash flows from new equipment is 75.000. Annual cash : Cost of ingredients: $45,000; Salaries expenses: $13,500; Maintenance expenses: $1,500. Depreciation expense: $5,000. In that case wh= time (as years) for this equipment? A) 3,0 O B) 2,0 OC) 5,0

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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The management of XYZ Beverage Company is considering to purchase a new equipment to increase the production and revenues. The useful life of the equipment is 10 years. Initial cost of equipment is $30.000. Expected annual cash flows from new equipment is 75.000. Annual cash Outflows are : Cost of ingredients: $45,000 ; Salaries expenses: $13,500; Maintenance expenses: $1,500. Depreciation expense: $5,000. In that case what is payback time (as years) for this equipment? O A) 3,0 O B) 2,0 O C) 5,0 D) 3,5 E) 4,0
Transcribed Image Text:The management of XYZ Beverage Company is considering to purchase a new equipment to increase the production and revenues. The useful life of the equipment is 10 years. Initial cost of equipment is $30.000. Expected annual cash flows from new equipment is 75.000. Annual cash Outflows are : Cost of ingredients: $45,000 ; Salaries expenses: $13,500; Maintenance expenses: $1,500. Depreciation expense: $5,000. In that case what is payback time (as years) for this equipment? O A) 3,0 O B) 2,0 O C) 5,0 D) 3,5 E) 4,0
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