Question
Oriental Corporation has gathered the following data on a proposed investment project: Investment in depreciable equipment $ 540,000 Annual net cash flows $ 78,000 Life
Oriental Corporation has gathered the following data on a proposed investment project:
| Investment in depreciable equipment | $ | 540,000 | |
| Annual net cash flows | $ | 78,000 | |
| Life of the equipment | 20 | years | |
| Salvage value | $ | 0 | |
| Discount rate | 10 | % | |
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:
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
ISE Introductory Financial Accounting For Business
Authors: Thomas P. Edmonds, Christopher Edmonds
2nd Edition
1260575306, 9781260575309
