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xxMikexx [17]
3 years ago
12

Harvey Corporation is studying a project that would have a ten-year life and would require a $450,000 investment in equipment wh

ich has no salvage value. The project would provide net operating income each year as follows for the life of the project (Ignore income taxes.):
Business
1 answer:
kakasveta [241]3 years ago
8 0

Answer:

3 years

Explanation:

The formula to compute the payback period is shown below:

= Initial investment ÷ Net cash flow

where,  

Initial investment is $450,000

And, the net cash flow = annual net operating income + depreciation expenses

= $105,000 + $45,000

= $150,000

Now put these values to the above formula  

So, the value would equal to

= ($450,000) ÷ ($150,000)

= 3 years

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