The managerial accountant at New Jewelry considers an investment in a gem cleaning piece of equipment that may increase the value of gems because it fills in the fractures of lower-value gems. The initial cost of the equipment is $1,480,000; whereas the annual net cash inflow is $425,000. The managerial accountant projects a useful life of 13 years. The resale value of the equipment is forecasted at $450,000. Calculate the annual depreciation expense. What is the expected payback period of this investment?

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The Answer of The managerial accountant at New Jewelry considers an investment in a gem cleaning piece of equipment that may increase the value of gems because it fills in the fractures of lower-value gems. The initial cost of the equipment is $1,480,000; whereas the annual net cash inflow is $425,000. The managerial accountant projects a useful life of 13 years. The resale value of the equipment is forecasted at $450,000. Calculate the annual depreciation expense. What is the expected payback period of this investment?

The Managerial Accountant at New Jewelry Considers an Investment in a Gem