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Homework answers / question archive / Fire Corp
Fire Corp. is considering the purchase of a new piece of equipment. The equipment costs $50,200 and will have a salvage value of $5,020 after nine years. Using the new piece of equipment will increase Fire's annual cash flows by $6,020. a. What is the payback period for the new piece of equipment? (Round your answer to 2 decimal places.) Payback Period Years b. Suppose that the increase in cash flows was $10,020 in the first year, then decreased by $1,000 each year over the life of the equipment. What is the payback period for the equipment? (Round your answer to 2 decimal places.) Payback Period Years
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