Concept Introduction:
Payback Period: Payback period is the period in which the project recovers its initial cost of the investment. It can be calculated by dividing the initial investment by the annual
Requirement-a:
To Calculate:
The Return on investment for the project
Concept Introduction:
Return on Investment (ROI): The return on investment is a profitability ratio that measures the percentage of profit earned on the investment made. It is calculated with the help of following formula:
Payback Period: Payback period is the period in which the project recovers its initial cost of the investment. It can be calculated by dividing the initial investment by the annual cash inflow from the project. The formula to calculate the Payback period is as follows:
Requirement-b:
To Indicate:
The importance of Payback period for the decision making
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Chapter 16 Solutions
Accounting: What the Numbers Mean
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