Question: Compute the payback period for a project with the following cash flows, if the companys discount rate is 12%. Initial outlay = $450 Cash flows:

Compute the payback period for a project with the following cash flows, if the company’s discount rate is 12%. 

Initial outlay = $450 

Cash flows:

Year 1 = $325

Year 1 = $ 65

Year 3 = $100

A. 2.88 years

B. 3.43 years

C. 2.6 years

D. 3.17 years

Step by Step Solution

★★★★★

3.50 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

C 26 years Computation of the pay back pe... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

68-B-A-T-V-M (883).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Q:

Swerling Company is considering a project with the following cash flows. What is the payback period of the proposed Swerling Company project? What is the net present value of the proposed Swerling...

Q:

Compute the payback period for each of these two separate investments (round the payback period to two decimals): a. A new operating system for an existing machine is expected to cost $250,000 and...

Q:

Compute the payback period for each of these two separate investments (round the payback period to two decimals): a. A new operating system for an existing machine is expected to cost $260,000 and...

Q:

Compute the payback period for a project with the following cash flows, if the company's discount rate is 14%. Initial outlay $460 Cash flow year 1 =$325 Cash flow year 2 = $75 Cash flow year 3 = $100

Q:

Compute the payback period for a project with the following cash flows, if the company's discount rate is 14%. Initial outlay $460 Cash flow year 1 =$325 Cash flow year 2 = $75 Cash flow year 3 =...

Q:

Compute the payback period for a project with the following cash flows, if the company's discount rate is 0.1375, compounded annually. The firm has a 3-year payback requirement for non-discounted...

Q:

Compute the payback period for a project with the following cash flows, if the company's discount rate is 1 4 % Initial outlay $ 4 6 0 Cash flow year 1 = 5 3 2 5 Cash flow year 2 = \ $ 7 5 Cash flow...

Q:

Compute the Payback Periods for a project with the following cash flows, if the companys discount rate is 12.99%. Initial outlay = -$10,000 Cash flows: Year 1 = $2500 Year 2 = $4700 Year 3 = $1,628.8...

Q:

62. Compute the Payback Period for a project with the following cash flows, if the company's discount rate is 12%

Q:

Compute the payback period for a project with the following cash flows, if the companys discount rate is 12%.

Q:

Tom Zopf owns and manages a computer repair service, which had the following trial balance on December 31, 2016 (the end of its fiscal year). TABLETTE REPAIR SERVICE, INC. Trial Balance December 31,...

Q:

If an audit client does not have prenumbered checks, what type of misstatement has a greater chance of occurring? Under the circumstances, what audit procedure can the auditor use to compensate for...

Q:

Using the monetarist/new classical model, explain the impact on real GDP, the price level and unemployment, of the following policies of a country's central bank:

Q:

Consider the following linearly constrained optimization problem: Maximize f(x) ln(x1 1) x2 2 , subject to x1 2x2 3 and x1 0, x2 0, where ln denotes the natural logarithm, (a) Verify that this...

Q:

Green Wave Company has the following transactions. 1.Pay for rent in the current month, $1,500. 2.Purchase equipment for $40,000 cash. 3.Purchase office supplies on account for $1,000. 4.Provide...

Q:

Boilermaker House Painting Company incurs the following transactions for September. 1.Pay dividends of $2,000 to stockholders. 2.Purchase a building for $60,000 cash. 3.Pay advertising of $1,000 for...

Q:

At the beginning of April, Owl Corporation has a balance of $15,200 in the Retained Earnings account. During the month of April, Owl had the following external transactions. 1.Issue common stock for...

Q:

Given an interest rate of 4.2 percent per year, what is the value at date t = 7 of a perpetual stream of $2,600 payments that begins at date t = 15? (Do not round intermediate calculations and round...

Q:

MJSProblem 4-34 Growing Annuity Payments You want to accumulate $2 millions by your retirement date, which is 25 years from now. You will make 25 deposits in your bank, with the first occurring today...

Q:

We are now considering investing in a surface-mount placement (SMP) machine: a $500,000 initial investment, annual savings of $92,500 for a 10-year period, and a salvage value of $50,000. We use 10%...