Answered

Welcome to Westonci.ca, the place where your questions are answered by a community of knowledgeable contributors. Discover detailed solutions to your questions from a wide network of experts on our comprehensive Q&A platform. Get quick and reliable solutions to your questions from a community of experienced experts on our platform.

The management of L Corporation is considering a project that would require an investment of $265,000 and would last for 6 years. The annual net operating income from the project would be $111,000, which includes depreciation of $30,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to (Ignore income taxes.): Multiple Choice 1.7 years 1.9 years 2.4 years 2.0 years

Sagot :

ayokenny2001

The payback period of the project is closest to 1.9 years

The formula to compute the payback period is shown below:

= Initial investment / Net cash flow

where,

Initial investment is $265,000

And, the net cash flow

= annual net operating income + depreciation expenses

= $111,000 + $30,000

= $141,000

Imputing the figure to the above formula  

= $265,000 / $141,000

= 1.9years

Hence, the payback period of the project is closest to 1.9 years

Learn more about cash flow here: https://brainly.com/question/13782330

#SPJ1

We appreciate your visit. Hopefully, the answers you found were beneficial. Don't hesitate to come back for more information. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Find reliable answers at Westonci.ca. Visit us again for the latest updates and expert advice.