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Osprey Company is evaluating two possible investments in depreciable plant assets. The company uses the straight-line method of depreciation. The following information is available
Osprey Company is evaluating two possible investments in depreciable plant assets. The company uses the straight-line method of depreciation. The following information is available Investment B Initial capital investment Investment A Estimated useful life Estimated residual value: $78,000 $140,000 8 years 8 years $9,000 $18,000 $12,000 $20,000 6% 5% Estimated annual net cash inflow Required rate of return How long is the payback period for Investment B? A. 6.1 years OB 7 years OC. 778 years OD 1.11 years
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