The following details are provided by a manufacturing company: Investment Useful life Estimated annual net cash inflows for first year Estimated annual net cash inflows for second year Estimated annual net cash inflows for next ten years Residual value Product line $1,090,000 12 years $420,000 $450,000 $310,000 $90,000 Straight-line Depreciation method Required rate of return Calculate the payback period for the investment. (Round your answer to two decimal places 15%
The following details are provided by a manufacturing company: Investment Useful life Estimated annual net cash inflows for first year Estimated annual net cash inflows for second year Estimated annual net cash inflows for next ten years Residual value Product line $1,090,000 12 years $420,000 $450,000 $310,000 $90,000 Straight-line Depreciation method Required rate of return Calculate the payback period for the investment. (Round your answer to two decimal places 15%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![The following details are provided by a manufacturing company:
Investment
Useful life
Estimated annual net cash inflows for first year
Estimated annual net cash inflows for second year
Estimated annual net cash inflows for next ten years
Residual value
Product line
OA. 3.95 years
OB. 2.71 years
OC. 2.6 years
O D. 4.36 years
$1,090,000
12 years
$420,000
$450,000
$310,000
$90,000
Straight-line
Depreciation method
Required rate of return
15%
Calculate the payback period for the investment. (Round your answer to two decimal places](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4c8143fb-abff-4c15-8f04-812b98801eeb%2F18f606f3-4044-463d-b7a6-a96751784550%2Fet0v4zo_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The following details are provided by a manufacturing company:
Investment
Useful life
Estimated annual net cash inflows for first year
Estimated annual net cash inflows for second year
Estimated annual net cash inflows for next ten years
Residual value
Product line
OA. 3.95 years
OB. 2.71 years
OC. 2.6 years
O D. 4.36 years
$1,090,000
12 years
$420,000
$450,000
$310,000
$90,000
Straight-line
Depreciation method
Required rate of return
15%
Calculate the payback period for the investment. (Round your answer to two decimal places
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