ABC Company is adding a new product line that will require an investment of
$1,500,000. The product line is estimated to generate cash inflows of $300,000 the first
year, $250,000 the second year, and $200,000 each year thereafter for ten more
years. What is the payback period?
Group of answer choices
none of the answers given are correct
6 years
6.75 years
5.25 years
Bryant Company has obtained the following data about a possible planned investment:
Cost
$270,000
Terminal salvage value in 8 years
$10,000
Additional annual cash revenues for 8 years
$250,000
Additional annual cash expenses for 8 years
$200,000
Estimated useful life in years
8
The company uses straight-line depreciation method. Compute the payback period.
Group of answer choices
1.08 years
5.4 years
1.35 years
3.27 years
