Murphy's Manufacturing has provided the following information on a proposed project:
$$\begin{array} { | l | l | }
\hline \text { Initial net investment cost of project } & \$ 80,000 \
\hline \text { Annual cash inflows } & \$ 10,000 \
\hline \text { Salvage value } & \$ 0 \
\hline \text { Useful life of project } & 10 \text { years } \
\hline \text { Required rate of return } & 10 \% \
\hline \text { Straight-line depreciation per year } & \$ 8,000 \
\hline
\end{array}$$
a.What is the payback period for the investment?
b.What is the simple rate of return on the investment?

Question

Murphy's Manufacturing has provided the following information on a proposed project:
 $$\begin{array} { | l | l | } 
\hline \text { Initial net investment cost of project } & \$ 80,000 \
\hline \text { Annual cash inflows } & \$ 10,000 \
\hline \text { Salvage value } & \$ 0 \
\hline \text { Useful life of project } & 10 \text { years } \
\hline \text { Required rate of return } & 10 \% \
\hline \text { Straight-line depreciation per year } & \$ 8,000 \
\hline
\end{array}$$ 
a.What is the payback period for the investment?
b.What is the simple rate of return on the investment?

Quizplus · Accepted Answer

The Answer of Murphy's Manufacturing has provided the following information on a proposed project:
 $$\begin{array} { | l | l | } 
\hline \text { Initial net investment cost of project } & \$ 80,000 \
\hline \text { Annual cash inflows } & \$ 10,000 \
\hline \text { Salvage value } & \$ 0 \
\hline \text { Useful life of project } & 10 \text { years } \
\hline \text { Required rate of return } & 10 \% \
\hline \text { Straight-line depreciation per year } & \$ 8,000 \
\hline
\end{array}$$ 
a.What is the payback period for the investment?
b.What is the simple rate of return on the investment?

Murphy's Manufacturing Has Provided the Following Information on a Proposed