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Adams Rentals can purchase a van that costs $84,000, it has an expected useful life of four years and no salvage value. Adams uses
Adams Rentals can purchase a van that costs $84,000, it has an expected useful life of four years and no salvage value. Adams uses straight-line depreciation. Expected revenue is $35,028 per year. Assume that depreciation is the only expense associated with this Investment. Required a. Determine the payback period. (Round your answer to 1 decimal place.) b. Determine the unadjusted rate of return based on the average cost of the investment. (Round your answer to 1 decimal place. (i.e., .234 should be entered as 23.4).) Answer is complete but not entirely correct. a Payback period 24 years b. Unadjusted rate of return 170%
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