Question

A.

What is the payback period for the following set of cash flows?

  

Year	Cash Flow
0	−$ 5,300
1	2,300
2	2,300
3	1,400
4	1,100

B.

A project with an initial cost of $22,350 is expected to generate cash flows of $5,200, $7,300, $8,400, $7,300, and $6,000 over each of the next five years, respectively. What is the project's payback period?

C.

A new project has an initial cost of $133,000. The equipment will be depreciated on a straight-line basis to a book value of $39,000 at the end of the four-year life of the project. The projected net income each year is $14,000, $17,450, $22,100, and $13,900, respectively. What is the average accounting return?

Answer 1