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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 Depreciation method Required rate of return Product Line $1,080,000 15 years $480,000 $380,000 $290,000 $70,000 Straight-line 15% Calculate the payback period for the investment. (Round answer to two decimal places.) OA. 4.23 years B. 2.25 years OC. 3.91 years OD. 2.76 years

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 Depreciation method Required rate of return Product Line $1,080,000 15 years $480,000 $380,000 $290,000 $70,000 Straight-line 15% Calculate the payback period for the investment. (Round answer to two decimal places.) OA. 4.23 years B. 2.25 years OC. 3.91 years OD. 2.76 years

FINANCIAL ACCOUNTING
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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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 Depreciation method Required rate of return Product Line $1,080,000 15 years $480,000 $380,000 $290,000 $70,000 Straight-line 15% Calculate the payback period for the investment. (Round answer to two decimal places.) OA. 4.23 years B. 2.25 years OC. 3.91 years OD. 2.76 years
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 Depreciation method Required rate of return Product Line $1,080,000 15 years $480,000 $380,000 $290,000 $70,000 Straight-line 15% Calculate the payback period for the investment. (Round answer to two decimal places.) OA. 4.23 years B. 2.25 years OC. 3.91 years OD. 2.76 years
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