Business, 19.05.2020 21:06 moningersavannah

Blaylock Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of tractors. The outlay required is $384,000. The NC equipment will last 5 years with no expected salvage value. The expected after-tax cash flows associated with the project follow:

Year Cash Revenues Cash Expenses
1 $510,000 $360,000
2 510,000 360,000
3 510,000 360,000
4 510,000 360,000
5 510,000 360,000

Required:
1. Compute the payback period for the NC equipment. Round your answer to two decimal places.
2. Compute the NC equipment's ARR. Round the percentage to one decimal place. Assume straight-line depreciation.

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Blaylock Company wants to buy a numerically controlled (NC) machine to be used in producing speciall...

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