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Calculating the cash payback period

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If an asset cost 16,000 has an expected useful life of 8 yrs is an expected to have a $2000 salvage value and generates net income cash inflows of $2000 a year, the cash payback period is

a. 8 yrs
b. 7 yrs
c 6 yrs
d. 5 yrs

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We see that net cash inflow is $2000 a year. In seven years $14000 will be ...

Solution Summary

Solution describes the steps to calculate the payback period in the given case.