The Following Details Are Provided by a Manufacturing Company Calculate the Payback Period for the Investment

question 144

Multiple Choice

The following details are provided by a manufacturing company: $$\begin{array} { | l | r | } \hline \text { Investment } & \text { Product line } \\\hline \text { Useful life } & \$ 1,100,000 \\\hline \text { Estimated annual net cash inflows for first year } & 12 \text { years } \\\hline \text { Estimated annual net cash inflows for second year } & \$ 400,000 \\\hline \text { Estimated annual net cash inflows for next ten years } & \$ 390,000 \\\hline \text { Residual value } & \$ 380,000 \\\hline \text { Depreciation method } & \$ 70,000 \\\hline \text { Required rate of return } & \text { Straight-line } \\\hline\end{array}$$ Calculate the payback period for the investment.(Round your answer to two decimal places.)

• A)2.75 years
• B)2.82 years
• C)2.55 years
• D)2.77 years

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Definitions:

Recessive

A genetic characteristic that is expressed in an organism's phenotype only when two copies of the gene responsible for the trait are present.

Phenotype

The observable physical or biochemical characteristics of an organism, as determined by both genetic makeup and environmental influences.

Homozygous

Referring to an individual having two identical alleles for a particular gene or trait.

Genotype

The genetic makeup of an organism, consisting of both visible and non-visible traits, which lays the foundation for the organism's phenotype.