Horizon Solutions Inc. is considering the purchase of automated machinery that is expected to have a useful

Question:

Horizon Solutions Inc. is considering the purchase of automated machinery that is expected to have a useful life of five years and no residual value. The average rate of return on the average investment has been computed to be 20%, and the cash was computed to be 5.5 years. Do you see any reason to question the validity of the data presented? Explain.

Payback Period
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...