(Ignore income taxes in this problem.) Your Corporation is considering a project that would require an investment of $405,000 and would last for 6 years. The annual net operating income from the project would be $120,000, which includes depreciation of $30,000. The scrap value of the project's assets at the end of the project would be $18,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to: 3.38 years 2.7 years 4.5 years 2.93 years
(Ignore income taxes in this problem.) Your Corporation is considering a project that would require an investment of $405,000 and would last for 6 years. The annual net operating income from the project would be $120,000, which includes depreciation of $30,000. The scrap value of the project's assets at the end of the project would be $18,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to: 3.38 years 2.7 years 4.5 years 2.93 years
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
(Ignore income taxes in this problem.) Your Corporation is considering a project that would require an investment of $405,000 and would last for 6 years. The annual net operating income from the project would be $120,000, which includes depreciation of $30,000. The scrap value of the project's assets at the end of the project would be $18,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to:
|
3.38 years
|
||
|
2.7 years
|
||
|
4.5 years
|
||
|
2.93 years
|
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education