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The Stanford Company has gathered the following data on a proposed investment project: Investment in Depreciable Equipment $200,000 Annual Net Cash Flows $ 50,000 Life
The Stanford Company has gathered the following data on a proposed investment project:
| Investment in Depreciable Equipment | $200,000 |
| Annual Net Cash Flows | $ 50,000 |
| Life of the Equipment | 10 years |
| Salvage Value | -0- |
| Discount Rate | 10% |
The company uses straight-line depreciation on all equipment. (Ignore income taxes in this problem.)
| A. | What would be the payback period for the investment? |
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| B. | What would be the simple rate of return on the investment? |
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| C. | What would be the net present value of this investment? |
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