A shoe manufacturer is evaluating new equipment that would custom fit athletic shoes. The new...
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Accounting
A shoe manufacturer is evaluating new equipment that would custom fit athletic shoes. The new equipment costs $100,000 and will generate $39,000 in net cash flows for five years. (Negative cumulative cash flows should be indicated with a minus sign.) Determine the break-even time for this equipment. Present Present Value Cumulative Present Year Net Cash Flow X Value of 1 = of Net Cash Value of Net Cash at 10% Flows Flows Initial investment (100,000) X 1.0000 = (100,000) $ (100,000) Year 1 39,000 X 0.9091 = Year 2 39,000 X 0.8264 = Year 3 39,000 X 0.7513 = Year 4 39,000 X 0.6830 = Year 5 39,000 X 0.6209 (Round break-even time answers to two decimal places.)
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