Payback and ARR

Each of the following scenarios is independent. All cash flows are after$-$tax cash flows.

Required:

Michael Kimathi has purchased a tractor for $$96,250.$ He expects to receive a net cash flow of $$29,250$ per year from the investment. What is the

payback period for Michael? Round your answer to two decimal places.

years

Bertha Lafferty invested $$350,000$ in athindromat. The facility has a $10-$year life expectancy with no expected salvage value. The laundromat will

produce a net cash flow of $$120,000$ per year. What is the accounting rate of return? Enter your answer as a whole percentage value $($for

example, $16\%$ should be entered as $"16"$ in the answer box$).$

Melannie Bayless has purchased a business building for $$327,000.$ She expects to receive the following cash flows over a $10-$year period:

Year $1$: $$45,500$

Year $2$: $$59,000$

Year $3-10$: $$87,200$

What is the payback period for Melannie? Round your answer to one decimal place.

years

What is the accounting rate of return? Enter your answer as a whole percentage value $($for example, $16\%$ should be entered as $"16"$ in the

answer box$).$