2. During the current year, Black Rose Inc. had an investment of P 200,000 that is expected to produce annual cash earning of P 65,000 for 7 years. The salvage value for the first year is P 82,000 and is expected to decrease by P 10,000 annually. a) What is the payback period? b) What is the bail-out period? c) Considering your answers on the first two, which is better for measuring the returns of this investment?

2. During the current year, Black Rose Inc. had an investment of P 200,000 that is expected to produce annual cash earning of P 65,000 for 7 years. The salvage value for the first year is P 82,000 and is expected to decrease by P 10,000 annually. a) What is the payback period? b) What is the bail-out period? c) Considering your answers on the first two, which is better for measuring the returns of this investment?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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