1)

Determine the payback period for a proposed investment costing $50,000 as follows.

Year Cash flow

0 -$50,000 investment

1 $10,000

2 $12,000

3 $15,000

4 $18,000

5 $20,000

a)year 5

b)year 4

c)year 2

d)year 3

2)

Determine the conventional payback period (to the nearest year) for the following project if the MARR is 10%.

initial cost $10,000

Annual maintenance $500 in year 1, increasing by $200 per year

Annual Income $3000

Salvage Value $4000

Useful Life 10 years

a) year 4

b)year 3

c)year 5

d) year 6