The following data are given for Encino Aluminium Company: Initial cost of proposed equipment $75,000 Estimated useful life 7 years Estimated annual cash flow $18,000 Predicted residual value at the end of the useful life $ 3,000 Cost of capital (required rate of return) 12% Compute the payback period in years.

The following data are given for Encino Aluminium Company: Initial cost of proposed equipment $75,000 Estimated useful life 7 years Estimated annual cash flow $18,000 Predicted residual value at the end of the useful life $ 3,000 Cost of capital (required rate of return) 12% Compute the payback period in years.

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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