Management of a manufacturing business is considering an investment of $ 375,000 in a capital project and $ 200,000 in working capital during the first year of operation. The project will generate $ 90,000 in cash inflow each year over the next twelve years. At the end of the project, the company will sell the assets for $ 200,000 and recover the entire working capital. The company's weighted average cost of capital is 12%.
-The payback period is ________________________ .

Question

Quizplus · Accepted Answer

The Answer of Management of a manufacturing business is considering an investment of $ 375,000 in a capital project and $ 200,000 in working capital during the first year of operation. The project will generate $ 90,000 in cash inflow each year over the next twelve years. At the end of the project, the company will sell the assets for $ 200,000 and recover the entire working capital. The company's weighted average cost of capital is 12%.
-The payback period is ________________________ .

Management of a Manufacturing Business Is Considering an Investment of