Zebulon,Inc

question 42

Essay

Zebulon,Inc.is evaluating two possible investments in depreciable plant assets.The company uses the straight-line method of depreciation.The following information is available:

Compute the payback period for each investment.Show your calculations and round to one decimal place.

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Definitions:

Note Receivable

A financial asset representing a written promise to receive a specific sum of money at a future date.

Other Receivables

Financial claims against entities other than customers, which might include tax refunds, interest due, and insurance claims.

Noncurrent Assets

Noncurrent assets are long-term assets that are not expected to be converted into cash or used up within one year, including property, plant, and equipment.

Current Assets

Cash and other assets that are expected to be converted to cash or sold or used up, usually within one year or less, through the normal operations of the business.