ABC Corporation made a net investment of P500,000 in a vending machine. Over the five years of its useful life, the machine is expected to have net cashflows of P250,000, P200,000, P80,000, P75,000 and P50,000. Assuming the incremental cost of capital was 9%, compute the following: A. Discounted payback period in years of the vending machine B. Internal rate of return of the investment

ABC Corporation made a net investment of P500,000 in a vending machine. Over the five years of its useful life, the machine is expected to have net cashflows of P250,000, P200,000, P80,000, P75,000 and P50,000. Assuming the incremental cost of capital was 9%, compute the following: A. Discounted payback period in years of the vending machine B. Internal rate of return of the investment

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 1PA: Your company is planning to purchase a new log splitter for is lawn and garden business. The new...

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