Question
Falcon Crest Aces (FCA), Inc., is considering the purchase of a small plane to use in its wing-walking demonstrations and aerial tour business. Various information
Falcon Crest Aces (FCA), Inc., is considering the purchase of a small plane to use in its wing-walking demonstrations and aerial tour business. Various information about the proposed investment follows:
| Initial investment | $ | 290,000 | |||||
| Useful life | $ | 10 | years | ||||
| Salvage value | 25,000 | ||||||
| Annual net income generated | $ | 6,400 | |||||
| FCA's cost of capital | 9 | % | |||||
Assume straight line depreciation method is used.
2. Payback period. (Round your answer to 2 decimal places.)
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Auditing Cases An Interactive Learning Approach
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt
5th International Edition
0132815591, 9780132815598
