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Calculate the payback period of the equipment

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Reference no: EM132590931

Geneva Fitness Center is considering an investment in some additional weight training equipment. The equipment has an estimated useful life of 10 years with no salvage value at the end of the 10 years. Geneva expects net annual cash inflows of R54,000 from this equipment. The cost of capital for Geneva is 14%.

Required:

Question 1: Calculate the purchase price of the equipment.

Question 2: Calculate the payback period of the equipment.

Reference no: EM132590931

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