Question
GuSont Inc. was considering an investment in the following project: Required initial investment$990,000 Net annual after-tax cash inflow$161,000 Annual depreciation expense (($990,000 $167,000)/10 years)$82,300 Estimated
GuSont Inc. was considering an investment in the following project:
Required initial investment$990,000
Net annual after-tax cash inflow$161,000
Annual depreciation expense (($990,000 $167,000)/10 years)$82,300
Estimated salvage value$167,000
Life of the project in years10
Assume that cash inflows occur evenly throughout the year. The estimated payback period in years (rounded to one decimal place) for the proposed project is:
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Valuation The Art and Science of Corporate Investment Decisions
Authors: Sheridan Titman, John D. Martin
3rd edition
133479528, 978-0133479522
