(Ignore income taxes in this problem. )Chee Corporation has gathered the following data on a proposed investment project: The company uses straight-line depreciation.Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the investment is closest to:

Question

(Ignore income taxes in this problem. )Chee Corporation has gathered the following data on a proposed investment project:  The company uses straight-line depreciation.Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the investment is closest to:

Quizplus · Accepted Answer

Payback period = Investment required ÷ Annual net cash inflow
= $240, 000 ÷ $50, 000 per year = 4.8 years

(Ignore Income Taxes in This Problem