Ch 19 > Payback and ARR Each of the following scenarios is independent. All cash flows are after-tax cash flows. Required: 1. Michael Kimathi has purchased a tractor for $93,750. He expects to receive a net cash flow of $28,500 per year from the investment. What is the payback period for Michael? Round your answer to two decimal places. 3.29 years 2. Bertha Lafferty invested $367,500 in a laundromat. The facility has a 10-year life expectancy with no expected salvage value. The laundromat will produce a net cash flow of $109,000 per year. What is the accounting rate of return? Enter your answer as a whole percentage value (for example, 16% should be entered as "16" in the answer box). 20 % 3. Melannie Bayless has purchased a business building for $327,000. She expects to receive the following cash flows over a 10- year period: Year 1: $45,500 Year 2: $55,500 Year 3-10: $87,200 What is the payback period for Melannie? Round your answer to one decimal place. 4.4 X years What is the accounting rate of return? Enter your answer as a whole percentage value (for example, 16% should be entered as "16" in the answer box). 14 % Feedback Check My Work 1. The payback period is the time required for a firm to recover its original investment. 2. The accounting rate of return measures the return on a project in terms of accrual based income as opposed to using a project's cash flow. 3. The payback period is the time required for a firm to recover its original investment. Check My Work Previous Assis