Paramount Carpets is considering purchasing new equipment costing $736,000.The company's management has estimated that the equipment will generate cash flows as follows:

Considering the residual value is zero,calculate the payback period.(Round your answer to two decimal places. )

Question

Paramount Carpets is considering purchasing new equipment costing $736,000.The company's management has estimated that the equipment will generate cash flows as follows:

Considering the residual value is zero,calculate the payback period.(Round your answer to two decimal places. )

Quizplus · Accepted Answer

11ea8a42_4fc5_5bb4_8b44_674c12bb1e10_TB5024_00 Payback = 3 years + ($736,000 − $696,000)/ $260,000 = 3.15 years

Paramount Carpets Is Considering Purchasing New Equipment Costing $736,000