Question
Oriental Corporation has gathered the following data on a proposed investment project: Investment in depreciable equipment $ 510,000 Annual net cash flows $ 90,000 Life
Oriental Corporation has gathered the following data on a proposed investment project:
| Investment in depreciable equipment | $ 510,000 | |
|---|---|---|
| Annual net cash flows | $ 90,000 | |
| Life of the equipment | 10 | years |
| Salvage value | $ 0 | |
| Discount rate | 7% |
The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment.
The payback period for the investment would be: (Round your answer to 1 decimal place.)
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Principles of Financial Accounting
Authors: Belverd E. Needles, Marian Powers
12th edition
978-1133940562, 1133940560, 978-1285608464, 1285608461, 1133939287, 978-0357693605, 978-1285607047, 128560704X, 978-1133939283
