Khazanchi is considering an investment proposal with the following cash flows:

Initial investment - depreciable assets ........ $90,000

Initial investment - working capital......... 12,500

Net cash inflows from operations (per year for 8 years) ........ 25,000

Disinvestment - depreciable assets ...... 10,000

Disinvestment - working capital 12,500

1. Determine the payback period.
2. Determine the accounting rate of return in initial investment.
3. Determine the accounting rate of return on average investement.

Answer rating: 100% (QA)

To determine the payback period we need to calculate the time it takes for the cumulative net cash i... View the full answer