Sentinel Company is considering an investment in technology to improve its operations. The investment will...
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Sentinel Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $259,000 and will yield the following expected cash flows. Management requires investments to have a payback period of 2 years, and it requires a 8% return on investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the table provided.)
Period Nm un Cash Flow $ 48,400 53,200 76,000 95,600 126,400 Required: 1. Determine the payback period for this investment. 2. Determine the break-even time for this investment. 3. Determine the net present value for this investment. Year Cash inflow (outflow) Cumulative Net Cash Inflow (outflow) $ (259,000) 3 4 5 - Payback period = Present Value of Cash inflow (outflow) Cumulative Present Value of Table factor Cash Flows Cash Flows O $ $ (259,000)|| 4 5 Break-even time = Net present value
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