Question
Investment A Investment B Investment $ 680,000 $ 120,000 Useful life 10 years 10 years Estimated annual net cash inflows for 8 years $ 150,000
| Investment A | Investment B | |
| Investment | $ 680,000 | $ 120,000 |
| Useful life | 10 years | 10 years |
| Estimated annual net cash inflows for 8 years | $ 150,000 | $ 27,000 |
| Residual value | $ 30,000 | $0 |
| Depreciation method | Straightline | Straightline |
| Required rate of return | 14% | 10% |
What is the payback period for Investment B (in years)?
Group of answer choices
5.44
4.44
6.00
4.00
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Financial Accounting
Authors: Robert Libby, Patricia Libby, Frank Hodge
10th Edition
1260481352, 978-1260481358
