Vaughn was presented with a second capital investment that provided similar production facilities as the first one. This investment cost $ \$ 395,000 $, had a useful life of 7 years with a salvage value of $ \$ 16,000 $. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $\$ 23,838 $ and $\$ 79,000 V) respectively. Vaughn's \( 7 \%$ cost of capital is also the required rate of return on the investment. Compute the cash payback period. (Round answer to 0 decimal places, e.s. 25.) Cash payback period yearsUsing the discounted cash flow technique, compute the net present value.

Vaughn was presented with a second capital investment that provided similar production facilities as the first one. This investment cost $ \$ 395,000 $, had a useful life of 7 years with a salvage value of $ \$ 16,000 $. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $\$ 23,838 $ and $\$ 79,000 V) respectively. Vaughn's \( 7 \%$ cost of capital is also the required rate of return on the investment. Compute the cash payback period. (Round answer to 0 decimal places, e.s. 25.) Cash payback period yearsUsing the discounted cash flow technique, compute the net present value.

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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