Oriental Corporation has gathered the following data on a proposed investment project: Investment in depreciable equipment Annual net cash flows Life of the equipment Salvage value Discount rate $410,000 $ 60,000 16 years 0 9% The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the investment would be: (Round your answer to 1 decimal place.) Multiple Choice 0.1 years 1.0 years 4.8 years 6.8 years
Oriental Corporation has gathered the following data on a proposed investment project: Investment in depreciable equipment Annual net cash flows Life of the equipment Salvage value Discount rate $410,000 $ 60,000 16 years 0 9% The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the investment would be: (Round your answer to 1 decimal place.) Multiple Choice 0.1 years 1.0 years 4.8 years 6.8 years
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 14E
Question
Give me step by step solution and explanation
![Oriental Corporation has gathered the following data on a proposed investment project:
Investment in depreciable equipment
Annual net cash flows
Life of the equipment
Salvage value
Discount rate
$410,000
$ 60,000
16 years
0
9%
The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment.
The payback period for the investment would be: (Round your answer to 1 decimal place.)
Multiple Choice
0.1 years
1.0 years
4.8 years
6.8 years](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F25f864e7-038e-43b2-8360-e57eaecd5e16%2F9c31f2df-d188-4b51-8a28-01aeb97e23b6%2Fi2vs0l_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Oriental Corporation has gathered the following data on a proposed investment project:
Investment in depreciable equipment
Annual net cash flows
Life of the equipment
Salvage value
Discount rate
$410,000
$ 60,000
16 years
0
9%
The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment.
The payback period for the investment would be: (Round your answer to 1 decimal place.)
Multiple Choice
0.1 years
1.0 years
4.8 years
6.8 years
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