A Company Is Considering the Purchase of a New Piece

question 138

True/False

A company is considering the purchase of a new piece of equipment for $90,000. Predicted annual cash inflows from the investment are $36,000 (year 1), $30,000 (year 2), $18,000 (year 3), $12,000 (year 4), and $6,000 (year 5). The average income from operations over the 5-year life is $20,400. The payback period is 3.5 years.

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Definitions:

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Psychotropic Medication

Drugs prescribed to affect the mind, emotions, and behavior, used in the treatment of mental health disorders.

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