question an anticipated purchase of equipment for 490 000 with a useful life of 8 ye 4287426
Question
An anticipated purchase of equipment for $490,000 with a useful life of 8 years and no residual value is expected to yield the following annual net incomes and net cash flows:
What is the cash payback period?
a.5 years
b.4 years
c.3 years
d.6 years
|
Year |
Net Income |
Net Cash Flow |
||
|
1 |
$60,000 |
|
$110,000 |
|
|
2 |
50,000 |
|
100,000 |
|
|
3 |
50,000 |
|
100,000 |
|
|
4 |
40,000 |
|
90,000 |
|
|
5 |
40,000 |
|
90,000 |
|
|
6 |
40,000 |
|
90,000 |
|
|
7 |
40,000 |
|
90,000 |
|
|
8 |
40,000 |
|
90,000 |
|