Breakeven cash inflows The One Ring Company, a leading producer of fine cast silver jewelry,...
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Accounting
Breakeven cash inflows The One Ring Company, a leading producer of fine cast silver
jewelry, is considering the purchase of new casting equipment that will allow it to expand
its product line. The up-front cost of the equipment is $750,000. The company
expects that the equipment will produce steady income throughout its 10-year life.
a. If One Ring requires a 9% return on its investment, what minimum yearly cash
inflow will be necessary for the company to go forward with this project?
b. How would the minimum yearly cash inflow change if the company required a
12% return on its investment?
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