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...


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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<br>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<br>: Cost of ingredients: $45,000 ; Salaries expenses: $13,500; Maintenance expenses: $1,500. Depreciation expense: $5,000. In that case what is payback<br>time (as years) for this equipment?<br>O A) 3,0<br>O B) 2,0<br>O C) 5,0<br>D) 3,5<br>E) 4,0<br>

Extracted 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

Jun 10, 2022
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