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What is the payback period for the espresso bar

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Question: Management at Jessrey Grind wants to install an espresso bar in its restaurant.The espresso bar:

• Costs $140,000 and has a 10-year life.

• Will generate net annual cash inflows of $35,000.

Management requires a payback period of 5 years or less on all investments.

Required: a. What is the payback period for the espresso bar? Show your workings.

b. Will the management of Daily Grind invest in the espresso bar? Explain.

Reference no: EM132745610

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