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21 July, 04:23

Overland Corporation has gathered the following data on a proposed investment project:

Investment required in equipment: $150,000

Annual cash inflow: $40,000

Salvage value of equipment: $0

Life of the investment: 10 years

Required rate of return: 10%

The company uses straight-line depreciation on all equipment. Assume cash flows occur

uniformly throughout a year except for the initial investment.

The payback period for the investment is:

A. 0.27 years

B. 3.75 years

C. 10.00 years

D. 2.13 years

The net present value of this investment is:

A. $40,000

B. $3,625

C. $57,831

D. $95,800

The internal rate of return on the investment is closest to:

A. 23%

B. 25%

C. 24%

D. 21%

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Answers (1)
  1. 21 July, 04:46
    0
    A D C are the answers to your question if I'm not wrong
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