Author Question: Boyle Company is evaluating two possible investments in depreciable plant assets. The company uses ... (Read 76 times)

bobthebuilder · **on:** Jan 5, 2020

Boyle Company is evaluating two possible investments in depreciable plant assets. The company uses the straight-line method of depreciation. The following information is available:

	Investment A	Investment B
Initial capital investment	$100,000	$150,000
Estimated useful life	3 years	3 years
Estimated residual value	$10,000	$15,000
Estimated annual net cash inflow for 3 years	$25,000	$40,000
Required rate of return	10%	12%

How long is the payback period for Investment A at Boyle Company?
◦ 4.00 years
◦ 2.49 years
◦ 3.60 years
◦ 10.00 years

aburgess · **Reply #1 on:** Jan 5, 2020

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