Carper Company is considering a capital investment of $378,400 in additional productive facilities. The new machinery is expected to have useful life of 6 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $18,920 and $86,000, respectively. Carper has an 7% cost of capital rate, which is the required rate of return on the investment.

(a1)

Compute the cash payback period. (Round answer to 2 decimal places, e.g. 2.25.)

Cash payback period

years

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Carper Company is considering a capital investment of $378,400 in additional productive facilities. The new machinery is expected to have useful life of 6 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $18,920 and $86,000, respectively. Carper has an 7% cost of capital rate, which is the required rate of return on the investment.

(a1)

Compute the cash payback period. (Round answer to 2 decimal places, e.g. 2.25.)

Cash payback period

years

Click if you would like to Show Work for this question:

Open Show Work

Carper Company is considering a capital investment of $378,400 in additional productive facilities. The new machinery is expected to have useful life of 6 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $18,920 and $86,000, respectively. Carper has an 7% cost of capital rate, which is the required rate of return on the investment.

(a1)

Compute the cash payback period. (Round answer to 2 decimal places, e.g. 2.25.)

Cash payback period

years

Click if you would like to Show Work for this question:

Open Show Work