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tensa zangetsu [6.8K]
3 years ago
11

The Cavendish Company is considering a project with an initial investment of $8 million that has an accounting rate of return of

25%. The project will generate an annual net cash flow of $1.75 million and annual net operating income of $2 million. What is the project's payback period?
Business
1 answer:
ipn [44]3 years ago
8 0

Answer:

4 years and 2 months

Explanation:

The project's payback period is the length of time that the future cash flows take to equal the initial investment of the project.

Initial Investment = $8 million

Annual cash flows = $1.75 million

It will take 4 years and 2 months ($1 million /$8 million x 12) for annual cashflows to equal the Initial Investment of $8 million.

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2 years ago
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7 0
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Mazyrski [523]

Answer:

  see below

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