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yawa3891 [41]
3 years ago
12

A piece of equipment costs $30,000, and is expected to generate $8,500 of annual cash revenues and $1,500 of annual cash expense

s. The disposal value at the end of the estimated 10-year life is $3,000. Ignoring income taxes, the payback period is:
A. 3.53 years
B. 3.86 years
C. 4.29 years
D. 6.98 years

some other period of time not noted
Business
1 answer:
Mrac [35]3 years ago
6 0

Answer:

C. 4.29 years

Explanation:

The computation of the payback period is shown below:

Payback period = Initial investment of the equipment ÷ Cash flows

where,

Initial investment = $30,000

And, the cash flows is

= $8,500 - $1,500

= $7,000

So the payback period is

= $30,000 ÷ $7,000

= 4.29 years

By dividing the initial investment by the cash flows we can get the payback period and the same is applied above.

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.In 2027, instead of cashing in the bond for its then current value, you decide to hold the bond until it doubles in face value
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Answer:

The question is not complete,find below complete questions:

If you purchased a $50 face value bond in early 2017 at the then current interest rate of .10 percent per year, how much would the bond be worth in 2027? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. In 2027, instead of cashing the bond in for its then current value, you decide to hold the bond until it doubles in face value in 2037. What annual rate of return will you earn over the last 10 years?

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