Each of the following scenarios is independent. All cash flows are after-tax cash flows.

Required:

1. Brad Blaylock has purchased a tractor for $100,000. He expects to receive a net cash flow of $30,250 per year from the investment. What is the payback period for Jim? Round your answer to two decimal places. fill in the blank 1 years

2. Bertha Lafferty invested $382,500 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 $108,000 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). fill in the blank 2 %

3. Melannie Bayless has purchased a business building for $333,000. She expects to receive the following cash flows over a 10-year period:

Year 1: $43,000

Year 2: $59,000

Year 3-10: $84,000

What is the payback period for Melannie? Round your answer to one decimal place. fill in the blank 3 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). fill in the blank 4 %

Payback and ARR Each of the following scenarios is independent. All cash flows are after-tax cash flows. Required: 1. Brad Blaylock has purchased a tractor for $100,000. He expects to receive a net cash flow of $30,250 per year from the investment. What is the payback period for Jim? Round your answer to two decimal places. 3.10 x years 2. Bertha Lafferty invested $382,500 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 $108,000 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). 47 X % 3. Melannie Bayless has purchased a business building for $333,000. She expects to receive the following cash flows over a 10-year period: Year 1: $43,000 Year 2: $59,000 Year 3-10: $84,000 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). % Feedback Check My Work