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Business, 28.11.2019 07:31 thecool498

Overland corporation has gathered the following data on a proposed investment project:
investment required in equipment: $150,000
annual cash inflow: $40,000
salvage value of equipment: $0
life of the investment: 10 years
required rate of return: 10%
the company uses straight-line depreciation on all equipment. assume cash flows occur
uniformly throughout a year except for the initial investment.
the payback period for the investment is:
a. 0.27 years
b. 3.75 years
c. 10.00 years
d. 2.13 years
the net present value of this investment is:
a. $40,000
b. $3,625
c. $57,831
d. $95,800
the internal rate of return on the investment is closest to:
a. 23%
b. 25%
c. 24%
d. 21%

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Answers: 1

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