What is the payback period of the project, Accounting Basics

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What is the payback period of the project

Nowadays Manufacturing is considering an investment proposal with the following information:

Cost $450,000

Useful life 6 years (straight-line depreciation)

Annual Cash inflows $100,000 (estimated per year for 8 years)

Residual value $ 20,000

Required rate of return 10%

Answer the following questions concerning this proposal. Show your work.

a. What is the payback period of this project?

b. What is the NPV of this project?

c. Is the IRR greater or less than 10%? Explain your answer

d. Should the project be accepted based on your NPV analysis? Why or why not?

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Accounting Basics: What is the payback period of the project

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Recent Questions Asked Accounting Basics

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Ask an Expert for Answer!!

Accounting Basics: What is the payback period of the project

Reference No:- TGS0556571

Recent Questions Asked Accounting Basics

Q : Complete the amortization table for first three loan payment

Q : An examination of the accounting records

Q : Determine stated interest rate and effective-interest rate

Q : Explanation by reference to the major reconciling items

Q : What is the payback period of the project

Q : What is jackson''s deduction

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Q : The proportion between variable and fixed cost of goods

Q : Would company more or less likely to accept project today

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