Business, 22.04.2020 03:25 marahsenno

Problem 16-20 Using the payback period and unadjusted rate of return to evaluate alternative investment opportunities LO 16-4 Seth Fitch owns a small retail ice cream parlor. He is considering expanding the business and has identified an attractive investment opportunity. The investment involves purchasing a machine that would enable Mr. Fitch to offer frozen yogurt to customers. The machine would cost $8,040 and has an expected useful life of three years with no salvage value. Additional annual cash revenues and cash operating expenses associated with selling yogurt are expected to be $6,110 and $860, respectively. Required Determine the payback period for the investment. (Round your answer to 2 decimal places.) Determine the investment's annual incremental net income assuming straightline depreciation for the machine. Determine the unadjusted rate of return for the investment. (Round your answer to 2 decimal places.)

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Problem 16-20 Using the payback period and unadjusted rate of return to evaluate alternative investm...

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