Yates,IncIs Evaluating Two Possible Investments in Depreciable Plant Assets Compute the Payback Period for Each Investment

question 86

Essay

Yates,Inc.is evaluating two possible investments in depreciable plant assets.The company uses the straight-line method of depreciation.The following information is available:
$$\begin{array} { l r r } & \text { Investment A } & \text { Investment B } \\\text { Initial capital investment } & \$ 275,000 & \$ 225,000 \\\text { Estimated useful life } & 8 \text { years } & 7 \text { years } \\\text { Estimated residual value } & \$ 15,000 & \$ 20,000 \\\text { Estimated annual net cash inflow for 10 years } & \$ 55,000 & \$ 35,000 \\\text { Required rate of return } & 12 \% & 12 \%\end{array}$$ Compute the payback period for each investment.Show your calculations and round to one decimal place.

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Definitions:

Acceptable Macronutrient Distribution Ranges

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Daily Caloric Intake

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