Explore BrainMass

Explore BrainMass

    Accounting : Payback Period

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Carr Company is considering two capital investment proposals. Estimates regarding eac project are provide below:

    Project Soup Project Nuts
    Initial investment $400,000 $600,000
    Annual Net Income 20,000 42,000
    Net annual cash inflow 100,000 142,000
    Estimated useful life 5 years 6 years
    Salvage value 0 0
    The company requires a 10% rate of return on all new investments.

    Present Value of an Annuity of 1
    Periods 9% 10% 11% 12%
    5 3.890 3.791 3.696 3.605
    6 4.486 4.355 4.231 4.111

    The cash payback period for Project Soup is

    1. 20 years
    2. 10 years
    3 5 years
    4. 4 years

    © BrainMass Inc. brainmass.com June 3, 2020, 10:46 pm ad1c9bdddf
    https://brainmass.com/business/business-math/accounting-payback-period-249033

    Solution Summary

    The expert examines a payback period accounting.

    $2.19

    ADVERTISEMENT