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Shelduck Laundromat is trying to enhance the services it provides to?customers, mostly college students. It...

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Accounting

Shelduck Laundromat is trying to enhance the services it provides to?customers, mostly college students. It is looking into the purchase of new?high-efficiency washing machines that will allow for the?laundry's status to be checked via smartphone. Shelduck estimates the cost of the new equipment at $186,000. The equipment has a useful life of 9 years. Shelduck expects cash fixed costs of $78,000 per year to operate the new?machines, as well as cash variable costs in the amount of 10% of revenues. Shelduck evaluates investments using a cost of capital of 6?%.

Requirement:

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CoursHeroTranscribedText: 1. Calculate the payback period and the discounted payback period for this investment, assuming Shelduck expects to generate $180,000 in incremental revenues every year from the new machines. 2. Assume instead that Shelduck expects an uneven stream of incremental cash revenues from installing the new washing machines. Based on this estimated revenue stream, what are the payback and discounted payback periods for the investment? Year 1 2 3 4 5 6 7 8 9 Projected Revenue $110,000 $ 100,000 $ 150,000 $ 95,000 $ 165,000 $205,000 $150,000 $165,000 $170,000

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