Capital budgeting
Zhang Corporation is considering investing $190,000 in equipment to produce a new product. Useful service life of the equipment is estimated to be 5 years, with zero salvage value. Straight-line depreciation is used. The company estimates that production and sale of the new product will increase net income by $65,000 a year.
(a) The payback period will be __________ years.
(b) The expected rate of return on average investment will be _________.

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The Answer of Capital budgeting
Zhang Corporation is considering investing $190,000 in equipment to produce a new product. Useful service life of the equipment is estimated to be 5 years, with zero salvage value. Straight-line depreciation is used. The company estimates that production and sale of the new product will increase net income by $65,000 a year.
(a) The payback period will be __________ years.
(b) The expected rate of return on average investment will be _________.

Capital Budgeting Zhang Corporation Is Considering Investing $190,000 in Equipment to Produce