How do the payback and accounting rate of return methods work? If the amount invested is $100,000 and the yearly expected cash flows are $20,000 per year, what is the payback period? If the amount invested is $100,000, the residual value is $20,000 and the average annual operating income is $10,000, what is the ARR? What is the time value of money? Using the tables provided in Appendix A, if the future value of an investment five years from now needs to be $10,000, what is the present value? Assume the interest rate is 6%.

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The payback period and accounting rate of return ARR are two commonly used methods for evaluating investment projects Payback Period The payback perio... View the full answer