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Chapter 16 507 508 hilton managerial accounting

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Chapter 16507
508Hilton, Managerial Accounting, Seventh Edition
72.The payback period is best defined as:
73.Consider the following statements about the payback period:I.As shown in your text, the payback period considers the time value of money.II.The payback period can only be used if net cash inflows are uniform throughout aproject's life.III.The payback period ignores cash inflows that occur after the payback period is reached.Which of the above statements is (are) correct?
74.A piece of equipment costs $30,000, and is expected to generate $8,500 of annual cashrevenues and $1,500 of annual cash expenses. The disposal value at the end of the estimated10-year life is $3,000. Ignoring income taxes, the payback period is:
Chapter 16509
75.Portland is considering the acquisition of new machinery that will produce uniform benefitsover the next eight years. The following information is available:Annual savings in cash operating costs: $350,000Annual depreciation expense: $250,000If the company is subject to a 30% tax rate, what denominator should be used to compute themachinery's payback period?A.$70,000.B.$170,000.C.$245,000.D.$320,000.E.Some other amount.Answer: D LO: 8 Type: A, N
76.Pinecrest is considering a $600,000 investment in new equipment that is anticipated toproduce the following net cash inflows:YearNet Cash Inflows1$120,0002250,0003110,000480,0005160,000If cash flows occur evenly throughout a year, the equipment's payback period is:

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Term
Fall
Professor
N/A
Tags
Depreciation, Net Present Value, Internal rate of return

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