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Duke University Operations And Supply Chain Management Assignment Help - The equipment

Question - A company wishes to buy new equipment for $35,000. The equipment is expected to generate an additional $9,600 in cash inflows for seven years. All cash flows occur at year-end. A bank will make a $35,000 loan to the company at a 10% interest rate so that the company can purchase the equipment. Use the table below to determine break-even time for this equipment. Year Present Value of 1 at 10% 0 1.0000 1 0.9091 2 0.8264 3 0.7513 4 0.6830 5 0.6209 6 0.5645 7 0.5132 Break-even time is between 3 and 4 years. Break-even time is between 4 and 5 years. Break-even time is between 5 and 6 years. Break-even time is between 6 and 7 years. This project will never break-even.

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