Buster Corporation is evaluating a capital investment project which would require an initial investment of $285,000 to purchase machinery. The annual revenues and expenses generated solely by this project each year during the project's nine year life would be:
The residual value of the machinery at the end of the nine years would be $15,000. The payback period of this potential project in years would be closest to

Question

Buster Corporation is evaluating a capital investment project which would require an initial investment of $285,000 to purchase machinery. The annual revenues and expenses generated solely by this project each year during the project's nine year life would be:  
The residual value of the machinery at the end of the nine years would be $15,000. The payback period of this potential project in years would be closest to

Quizplus · Accepted Answer

B) Investment/Annual cash flow
$285,000 ÷ (62,000 + 30,000) = 3.1 yrs

Buster Corporation Is Evaluating a Capital Investment Project Which Would