GIVEN: Project C requires $800,000 net initial investment for new machinery with a 8-year life and a Salvage Value of $40,000. The company uses straight-line depreciation. Project C is expected to yield an annual Net Income of $65,000 per year. What is the Payback Period using the above information? A) 5 years B) 6 years C) 7 years D) 8 years E) None of the above

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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GIVEN: Project C requires $800,000 net initial investment for new machinery with a 8-year life
and a Salvage Value of $40,000. The company uses straight-line depreciation. Project C is expected
to yield an annual Net Income of $65,000 per year.
What is the Payback Period using the above information?
A) 5 years
B) 6 years
C) 7 years
D) 8 years
E) None of the above
Transcribed Image Text:GIVEN: Project C requires $800,000 net initial investment for new machinery with a 8-year life and a Salvage Value of $40,000. The company uses straight-line depreciation. Project C is expected to yield an annual Net Income of $65,000 per year. What is the Payback Period using the above information? A) 5 years B) 6 years C) 7 years D) 8 years E) None of the above
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