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A potential project involves an initial investment in machinery of RO.1,200,000 and has the following operating annual cash inflows. Year 1 – RO. 155,000 Year 2 – RO. 555,000 Year 3 – RO. 455,000 Year 4 – RO. 210,000 Year 5 – RO. 420,000 Year 6 – RO. 320,000 Year 7 – RO. 150,000 The machinery will be sold for scrap at the end of year 7 for RO.100,000. What is the payback period of this project? NOTE (IGNORE DEPRECIATION CALCULATION) a. 4 Years and 2 Months b. 3 Years and 3 Months c. 3 Years and 2 Months d. 3 Years and 4 Months

A potential project involves an initial investment in machinery of RO.1,200,000 and has the following operating annual cash inflows. Year 1 – RO. 155,000 Year 2 – RO. 555,000 Year 3 – RO. 455,000 Year 4 – RO. 210,000 Year 5 – RO. 420,000 Year 6 – RO. 320,000 Year 7 – RO. 150,000 The machinery will be sold for scrap at the end of year 7 for RO.100,000. What is the payback period of this project? NOTE (IGNORE DEPRECIATION CALCULATION) a. 4 Years and 2 Months b. 3 Years and 3 Months c. 3 Years and 2 Months d. 3 Years and 4 Months

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 6EB: The management of Ryland International Is considering Investing in a new facility and the following...
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A potential project involves an initial investment in machinery of RO.1,200,000 and has the following operating annual cash inflows.

Year 1 – RO. 155,000

Year 2 – RO. 555,000

Year 3 – RO. 455,000

Year 4 – RO. 210,000

Year 5 – RO. 420,000

Year 6 – RO. 320,000

Year 7 – RO. 150,000











The machinery will be sold for scrap at the end of year 7 for RO.100,000.
What is the payback period of this project?
NOTE (IGNORE DEPRECIATION CALCULATION)
a.
4 Years and 2 Months
b.
3 Years and 3 Months
c.
3 Years and 2 Months
d.
3 Years and 4 Months
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