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A company wishes to buy new equipment for $9,000. The equipment is expected to generate an additional $2,800 in cash inflows for six years. All cash...

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A company wishes to buy new equipment for $9,000. The equipment is expected to generate an additional $2,800 in cash inflows for six years. All cash flows occur at year-end. A bank will make a $9,000 loan to the company at a 10% interest rate so that the company can purchase the equipment. Use the table below to determine break-even time for this equipment. Break-even time is between 3 and 4 years. Break-even time is between 4 and 5 years. Break-even time is between 2 and 3 years. This project will never break-even. Break-even time is between 5 and 6 years.
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Accounting-8195450.xls

A company wishes to buy new equipment for $9,000. The equipment is expected to generate an additional $2,800 in cash inflows for six years. All cash flows occur at yearend. A bank will make a...

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