# Railways 3

Railway Corporation wants to purchase a new machine for $360,000. Management predicts that the machine can produce sales of$220,000 each year for the next 5 years. Expenses are expected to include direct materials, direct labor, and factory overhead (excluding depreciation) totaling $78,000 per year. The firm uses straight-line depreciation with no residual value for all depreciable assets. Railway's combined income tax rate is 40%. Management requires a minimum after-tax rate of return of 10% on all investments. What is the present value payback period, rounded to one-tenth of a year? Note: PV factors for 10% are as follows: year 1 = 0.909; year 2 = 0.826; year 3 = 0.751; year 4 = 0.683; year 5 = 0.621; the PV annuity factor for 10%, 5 years = 3.791. Assume that annual after-tax cash inflows occur at year-end. Result x = (Correct answer is: ?) ### Step-by-step explanation: Did you find an error or inaccuracy? Feel free to write us. Thank you! Tips to related online calculators Our percentage calculator will help you quickly calculate various typical tasks with percentages. Do you want to convert time units like minutes to seconds? #### You need to know the following knowledge to solve this word math problem: ## Related math problems and questions: • Annual income The annual income (in thousands of$) of fifteen families is 60, 80, 90, 96, 120, 150, 200, 360, 480, 520, 1060, 1200, 1450, 2500, 7200. Calculate the harmonic and geometric mean.
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