Determine how the equipment will be depreciated

Reference no: EM131793951

Question: The Fig Tree is considering purchasing some new equipment at a cost of $146,000. The equipment has a 3-year life and is expected to produce cash inflows of $42,000 in year 1, $94,000 in year 2, and $118,000 in year 3. The equipment will be depreciated using straight-line depreciation to a zero book value over the life of the project. What is the payback period?

Reference no: EM131793951

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