Langor Products is considering acquiring a manufacturing plant. The purchase price is $2,400,000. The owners believe the

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Langor Products is considering acquiring a manufacturing plant. The purchase price is $2,400,000. The owners believe the plant will generate net cash inflows of $300,000 annually. It will have to be replaced in nine years. To be profitable, the investment's payback period must occur before the investment's replacement date. Use the payback method to determine whether Langor should purchase this plant.
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,...
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Managerial Accounting

ISBN: 978-0134128528

5th edition

Authors: Karen W. Braun, Wendy M. Tietz

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