Preston, Inc. is evaluating two possible investments in depreciable plant assets. The company uses the straight-line...
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Preston, Inc. is evaluating two possible investments in depreciable plant assets. The company uses the straight-line method of depreciation. The following information is available: Initial capital investment Estimated useful life Estimated residual value $ Investment A Investment A Investment B Investment B 215,000 7 years 15,000 50,000 15% 280,000 $ 6 years 5,000 85,000 11% Estimated annual net cash inflow for 10 years Required rate of return. Compute the payback period for each investment. Show your calculations and round to one decimal place. Select the formula, then enter the amounts to calculate the payback period for each investment.. = Payback (in years) Preston, Inc. is evaluating two possible investments in depreciable plant assets. The company uses the straight-line method of depreciation. The following information is available: Initial capital investment Estimated useful life Estimated residual value $ Investment A Investment A Investment B Investment B 215,000 7 years 15,000 50,000 15% 280,000 $ 6 years 5,000 85,000 11% Estimated annual net cash inflow for 10 years Required rate of return. Compute the payback period for each investment. Show your calculations and round to one decimal place. Select the formula, then enter the amounts to calculate the payback period for each investment.. = Payback (in years)
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To calculate the payback period for each investment we can use the following formula Paybac... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
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