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Lindas Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment follows: Initial investment (2 limos) $ 1,680,000

Lindas Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment follows:

Initial investment (2 limos) $ 1,680,000
Useful life 10 years
Salvage value $ 140,000
Annual net income generated 164,640
LLTs cost of capital 15 %

Assume straight line depreciation method is used.

payback period?

cash inflow (for next 10 years)?

table factor = 5.21612

present value of cash inflow ?

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