Question
Each of the following scenarios is independent. All cash flows are after-tax cash flows. Required: 1. Brad Blaylock has purchased a tractor for $96,250. He
Each of the following scenarios is independent. All cash flows are after-tax cash flows.
Required:
1. Brad Blaylock has purchased a tractor for $96,250. He expects to receive a net cash flow of $28,000 per year from the investment. What is the payback period for Jim? Round your answer to two decimal places. Years
2. Bertha Lafferty invested $372,500 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). %
3. Melannie Bayless has purchased a business building for $320,000. She expects to receive the following cash flows over a 10-year period:
Year 1: $47,500 |
Year 2: $55,500 |
Year 3-10: $81,400 |
What is the payback period for Melannie? Round your answer to one decimal place. 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). %
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