IN The Ayayai Company is planning to purchase $553.000 of equipment with an estimated seven-year...
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IN The Ayayai Company is planning to purchase $553.000 of equipment with an estimated seven-year life and no estimated salvage value. The company has projected the following annual cash flows for the investment Projected Cash Year Flows 1 $201.000 2 151,000 3 101.000 4 80,000 5 80,000 41.000 7 41,000 Total $695,000 6 (a) Calculate the payback period for the proposed equipment purchase. Assume that all cash flows occur evenly throughout the year, Payback period years and months (b) if Ayayal requires a payback period of 4 years or less, should the company make this investment? The company make this investment
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