Each of the following scenarios is independent. All cash flows are after-tax cash flows. Required: 1. Michael Kimathi has purchased a tractor for $86,250. He expects to receive a net cash flow of $29,500 per year from the investment. What is the payback period for Michael? Round your answer to two decimal places. x years 2. Bertha Lafferty invested $365,000 in a laundromat. The facility has a 10-year life expectancy with no expected salvage val The laundromat will produce a net cash flow of $123,000 per year. What is the accounting rate of return? Enter your answe a whole percentage value (for example, 16% should be entered as "16" in the answer box). % 3. Melannie Bayless has purchased a business building for $322,000. She expects to receive the following cash flows over a 1 year period: Year 1: $41,500 Year 2: $59,500 Year 3-10: $83,600 What is the payback period for Melannie? Round your answer to one decimal place. years What is the accounting rate of return? Enter your answer as a whole percentage value (for example, 16% should be entered as "16" in the answer box).
Each of the following scenarios is independent. All cash flows are after-tax cash flows. Required: 1. Michael Kimathi has purchased a tractor for $86,250. He expects to receive a net cash flow of $29,500 per year from the investment. What is the payback period for Michael? Round your answer to two decimal places. x years 2. Bertha Lafferty invested $365,000 in a laundromat. The facility has a 10-year life expectancy with no expected salvage val The laundromat will produce a net cash flow of $123,000 per year. What is the accounting rate of return? Enter your answe a whole percentage value (for example, 16% should be entered as "16" in the answer box). % 3. Melannie Bayless has purchased a business building for $322,000. She expects to receive the following cash flows over a 1 year period: Year 1: $41,500 Year 2: $59,500 Year 3-10: $83,600 What is the payback period for Melannie? Round your answer to one decimal place. years What is the accounting rate of return? Enter your answer as a whole percentage value (for example, 16% should be entered as "16" in the answer box).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Each of the following scenarios is independent. All cash flows are after-tax cash flows.
Required:
1. Michael Kimathi has purchased a tractor for $86,250. He expects to receive a net cash flow of $29,500 per year from the
investment. What is the payback period for Michael? Round your answer to two decimal places.
x years
2. Bertha Lafferty invested $365,000 in a laundromat. The facility has a 10-year life expectancy with no expected salvage val
The laundromat will produce a net cash flow of $123,000 per year. What is the accounting rate of return? Enter your answe
a whole percentage value (for example, 16% should be entered as "16" in the answer box).
%
3. Melannie Bayless has purchased a business building for $322,000. She expects to receive the following cash flows over a 1
year period:
Year 1: $41,500
Year 2: $59,500
Year 3-10: $83,600
What is the payback period for Melannie? Round your answer to one decimal place.
years
What is the accounting rate of return? Enter your answer as a whole percentage value (for example, 16% should be
entered as "16" in the answer box).
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