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What is the payback period for the espresso bar

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Reference no: EM132783713

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:

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

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

Reference no: EM132783713

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