The equipment has a five-year life and an estimated salvage


Question - A company projects an increase in net income of $40,000 each year for the next five years if it invests $500,000 in new equipment. The equipment has a five-year life and an estimated salvage value of $50,000. The company uses the straight-line method of depreciation.

What is the net annual cash flow?

What is the cash payback period?

What is the annual rate of return?

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Accounting Basics: The equipment has a five-year life and an estimated salvage
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