Bill Plans to Open a Do-It-Yourself Dog Bathing Center in a Storefront

question 183

Multiple Choice

Bill plans to open a do-it-yourself dog bathing center in a storefront. The bathing equipment will cost $160,000. Bill expects the after-tax cash inflows to be $40,000 annually for seven years, after which he plans to scrap the equipment and retire to the beaches of Jamaica.

What is the project's payback period?

• A) 1.5 years
• B) 2.0 years
• C) 3.3 years
• D) 4.0 years
• E) 4.3 years

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