Solution-What is the present value payback period

What is the present value payback period

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Reference no: EM132826386

Pique Corporation wants to purchase a new machine for $378,000. Management predicts that the machine can produce sales of $226,000
each year for the next 5 years. Expenses are expected to include direct materials, direct labour, and factory overhead (excluding depreciation) totalling $76,000 per year. The firm uses straight-line depreciation with no residual value for all depreciable assets. Pique's combined income tax rate is 40%. Management requires a minimum after-tax rate of return of 10% on all investments.

Problem 1: What is the present value payback period (rounded to one-tenth of a year)?

Reference no: EM132826386

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What is the present value payback period

Reference no: EM132826386

Reference no: EM132826386

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