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Exercise 10-15A (Algo) Computing the payback period and unadjusted rate of return for the same investment opportunity LO 10-4 Franklin Rentals can purchase a van

Exercise 10-15A (Algo) Computing the payback period and unadjusted rate of return for the same investment opportunity LO 10-4

Franklin Rentals can purchase a van that costs $108,000; it has an expected useful life of four years and no salvage value. Franklin uses straight-line depreciation. Expected revenue is $45,360 per year. Assume that depreciation is the only expense associated with this investment.

Required

Determine the payback period.(Round your answer to 1 decimal place.)

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).)

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