Computing the payback period and unadjusted rate of return for the same investment opportunity Foy Rentals can

Question:

Computing the and unadjusted rate of return for the same investment opportunity Foy Rentals can purchase a van that costs $60,000; it has an expected useful life of three years and no . Foy uses straight-line depreciation. Expected revenue is $30,000 per year. Assume that depreciation is the only expense associated with this investment.
Required
a. Determine the Determine the unadjusted rate of return based on the average cost of the investment.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Payback Period
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...