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to LUIS Contents >> SECOND CHANCE EXAM 2 Problem 11 - X Company must replace one of its current machines with either Machine
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Answer #1
Payback period Machine A Machine B
Time Amount Cumulative Amount Cumulative
                                                                     -              (49,000.00)            (49,000.00)            (62,000.00)            (62,000.00)
                                                                1.00                 6,000.00            (43,000.00)                 7,000.00            (55,000.00)
                                                                2.00                 8,000.00            (35,000.00)                 4,000.00            (51,000.00)
                                                                3.00                 8,000.00            (27,000.00)                 3,000.00            (48,000.00)
                                                                4.00                 8,000.00            (19,000.00)                 3,000.00            (45,000.00)
                                                                5.00                 6,000.00            (13,000.00)                 3,000.00            (42,000.00)
                                                                6.00                 5,000.00              (8,000.00)                 2,000.00            (40,000.00)
                                                                7.00                 4,000.00              (4,000.00)                 2,000.00            (38,000.00)
Both the machine don’t have payback period as cashinflows are less than cash outflows
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