Excellent Manufacturing Company is considering the following investment proposal: $$\begin{array} { l l }
\text { Original investment } & \$ 15,000 \
\text { Operations (per year for four years): } & \
\text { Cash receipts } &\$ 10,550 \
\text { Cash expenditures } &\$ 6,200 \
\text { Salvage value of equipment after three years } &\$ 1,200 \
\text { Discount rate } &9 \%
\end{array}$$ The firm uses the straight-line method of depreciation with no mid-year convention. What is the payback period in years approximated to two decimal points, assuming no taxes are paid?

Question

Excellent Manufacturing Company is considering the following investment proposal: $$\begin{array} { l l } 
\text { Original investment } & \$ 15,000 \
\text { Operations (per year for four years): } &  \
\text { Cash receipts } &\$ 10,550  \
\text { Cash expenditures } &\$ 6,200  \
\text { Salvage value of equipment after three years } &\$ 1,200 \
\text { Discount rate } &9 \% 
\end{array}$$ The firm uses the straight-line method of depreciation with no mid-year convention. What is the payback period in years approximated to two decimal points, assuming no taxes are paid?

Quizplus · Accepted Answer

The Answer of Excellent Manufacturing Company is considering the following investment proposal: $$\begin{array} { l l } 
\text { Original investment } & \$ 15,000 \
\text { Operations (per year for four years): } &  \
\text { Cash receipts } &\$ 10,550  \
\text { Cash expenditures } &\$ 6,200  \
\text { Salvage value of equipment after three years } &\$ 1,200 \
\text { Discount rate } &9 \% 
\end{array}$$ The firm uses the straight-line method of depreciation with no mid-year convention. What is the payback period in years approximated to two decimal points, assuming no taxes are paid?

Excellent Manufacturing Company Is Considering the Following Investment Proposal The Firm Uses the Straight-Line Method of Depreciation with No