The Bokawkan company is considering to purchase a new machine. Annual cash returns on investment cost of P1,200,000 is expected to be at P220,000. Useful is estimated at 8 years. The company's cost of capital is 14% and income tax rate is 35%. What is the payback reciprocal of the investment? a. 20.5% b. 18.3% c. 11.9% d. 22.2%

The Bokawkan company is considering to purchase a new machine. Annual cash returns on investment cost of P1,200,000 is expected to be at P220,000. Useful is estimated at 8 years. The company's cost of capital is 14% and income tax rate is 35%. What is the payback reciprocal of the investment? a. 20.5% b. 18.3% c. 11.9% d. 22.2%

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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Question

a. 20.5%

b. 18.3%

c. 11.9%

d. 22.2%

Formula Formula ROI (%) = Net Income Principal Amount × 100

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