Salsa Company is considering an investment in technology to improve its operations. The investment costs...
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Salsa Company is considering an investment in technology to improve its operations. The investment costs $252,000 and will yield the following net cash flows. Management requires a 8% return on investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Year 1 2 3 4 5 w NE Net cash Flow $ 48,800 52,600 76,400 94,500 126,100 Required: 1. Determine the payback period for this investment. 2. Determine the break-even time for this investment. 3. Determine the net present value for this investment. Required: 1. Determine the payback period for this investment. 2. Determine the break-even time for this investment. 3. Determine the net present value for this investment. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the payback period for this investment. (Enter cash outflows with a minus sign. Round your Payback Period answer to 1 decimal place.) Year Cash inflow (outflow) Cumulative Net Cash Inflow (outflow) Initial investment $ $ (252,000) ANT (252,000) 48,800 Year 1 203.200 Year 2 52,600 Year 3 76,400 Year 4 94,500 126,100 Year 5 Determine the payback period for this investment. (Enter cash outflows with a minus sign. Round your Payback Period answer to 1 decimal place.) Year Cash inflow (outflow) Cumulative Net Cash Inflow (outflow) Initial investment $ (252,000) 48,800 Year 1 (252,000) 203,200 Year 2 52,600 Year 3 76,400 Year 4 94,500 Year 5 126,100 3 4 Calculate the portion of the year: Numerator for partial year Denominator for partial year [] $ 0.8 years 74,200 94,500 $ W Payback period =BER 3.8 years Determine the break-even time for this investment. (Enter cash outflows with a minus sign. Round your break-even time answer to 1 decimal place.) Year Cash inflow (outflow) Table factor Present Value of Cash Flows Cumulative Present Value of Cash Flows Initial investment $ (252,000) Year 1 Year 2 O Year 3 0 Year 4 0 Year 5 0 Break-even time
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