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Home Q & A Board Other Fields Homework Help Business Accounting
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bernie2981 bernie2981
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8 years ago
Pitt Company is evaluating two possible investments in depreciable plant assets. The company uses the straight-line method of depreciation. The following information is available:

   Investment A   Investment B
Initial capital investment   $112,500   $160,000
Estimated useful life   5 years   5 years
Estimated residual value   $10,000   $15,000
Estimated annual net cash inflow
For 3 years   $25,000   $40,000
Required rate of return   10%   12%

How long is the payback period for Investment B?
A) 10.67 years
B) 4.00 years
C) 3.63 years
D) 2.40 years
Textbook 
Managerial Accounting

Managerial Accounting


Edition: 4th
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nucleinuclei
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8 years ago
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bernie2981 Author
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#2
8 years ago
You're such a dedicated member, I very much appreciate the help.

Marking this solved ✓
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