The following details are provided by a manufacturing company: Investment Useful life Estimated annual net cash inflows for first year Estimated annual net cash inflows for second year Estimated annual net cash inflows for next ten years Residual value Depreciation method Required rate of return Product Line $1,080,000 15 years $480,000 $380,000 $290,000 $70,000 Straight-line 15% Calculate the payback period for the investment. (Round answer to two decimal places.) OA. 4.23 years B. 2.25 years OC. 3.91 years OD. 2.76 years
The following details are provided by a manufacturing company: Investment Useful life Estimated annual net cash inflows for first year Estimated annual net cash inflows for second year Estimated annual net cash inflows for next ten years Residual value Depreciation method Required rate of return Product Line $1,080,000 15 years $480,000 $380,000 $290,000 $70,000 Straight-line 15% Calculate the payback period for the investment. (Round answer to two decimal places.) OA. 4.23 years B. 2.25 years OC. 3.91 years OD. 2.76 years
Chapter14: Security Structures And Determining Enterprise Values
Section: Chapter Questions
Problem 8EP
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