Question
Sony Lavery is considering investing $45,000 in a project with the following cash revenues and expenses: Year Revenues Cash Expenses & Depreciation Year 1 $18,000
Sony Lavery is considering investing $45,000 in a project with the following cash revenues and expenses:
| Year | Revenues | Cash Expenses & Depreciation | ||
| Year 1 | $18,000 | $8,000 | ||
| Year 2 | $22,000 | $10,000 | ||
| Year 3 | $22,000 | $9,000 | ||
| Year 4 | $24,000 | $9,000 | ||
| Year 5 | $26,000 | $9,000 | ||
| Year 6 | $28,000 | $12,000 | ||
| Year 7 | $28,000 | $11,000 | ||
| Year 8 | $28,000 | $12,000 | ||
Assuming straight-line depreciation over 8 years, what is the payback period for the project?
a.between 2 and 3 years
b.between 5 and 6 years
c.between 7 and 8 years
d.between 6 and 7 years
e.between 4 and 5 years
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Auditing
Authors: Alan Millichamp, John Taylor
10th Edition
1408044080, 978-1408044087
