Lincoln Transportation Services is considering a capital expenditure proposal for the improvement of its distribution centre.The project would require a capital investment of $252,000;have a 5 year useful life with no residual value and generate net cash flows as follow:

Lincoln uses the straight line method of amortization on all capital assets.
Compute the payback period for this proposal.

Question

Lincoln Transportation Services is considering a capital expenditure proposal for the improvement of its distribution centre.The project would require a capital investment of $252,000;have a 5 year useful life with no residual value and generate net cash flows as follow:
  
Lincoln uses the straight line method of amortization on all capital assets.
Compute the payback period for this proposal.

Quizplus · Accepted Answer

The Answer of Lincoln Transportation Services is considering a capital expenditure proposal for the improvement of its distribution centre.The project would require a capital investment of $252,000;have a 5 year useful life with no residual value and generate net cash flows as follow:
  
Lincoln uses the straight line method of amortization on all capital assets.
Compute the payback period for this proposal.

Lincoln Transportation Services Is Considering a Capital Expenditure Proposal for the Improvement