Project A requires a $320,000 initial investment for new machinery with a five-year life and a salvage value of $31,500. The company uses straight-line depreciation.
Project A requires a $320,000 initial investment for new machinery with a five-year life and a salvage value of $31,500. The company uses straight-line depreciation. Project A is expected to yield annual net income of $29,100 per year for the next five years.
Compute Project A's payback period.
(Payback period= Cost of investment/ Annual net cash flow)
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Authors: John J Wild, Ken Shaw
25th Edition
1260247988, 978-1260247985
