HomeworkLib
Question

Suppose that a new car wash facility requires an investment of $100,000 and either has even...

Suppose that a new car wash facility requires an investment of $100,000 and either has even cash flows of $50,000 per year. What is the Payback Period: A. 4 years B. 5 years C. 2 years D. 1 year (20pts) Question 4 - Suppose that a new car wash facility requires an investment of $100,000 and either has even cash flows of $50,000 per year. What is the Payback Period: A. 4 years B. 5 years C. 2 years D. 1 year E. None of the above

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Payback period=initial cost/annual cash flows

=100,000/50,000

which is equal to

=2 years

0 0
Add a comment
Know the answer?
Add Answer to:
Suppose that a new car wash facility requires an investment of $100,000 and either has even...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Jan Booth is considering investing in either a storage facility or a car wash facility. Both...

    Jan Booth is considering investing in either a storage facility or a car wash facility. Both projects have a five-year life and require an investment of $400,000. The cash flow patterns for each project are given below. Storage facility: Even cash flows of $200,000 per year Car wash: $112,900, $143,400, $68,000, $126,000, and $92,000 Required: 1. Calculate the payback period for the storage facility (even cash flows). Round your answer to one decimal place. years 2. Calculate the payback period...

  • Jan Booth is considering investing in either a storage facility or a car wash facility. Both...

    Jan Booth is considering investing in either a storage facility or a car wash facility. Both projects have a five-year life and require an investment of $390,000. The cash flow patterns for each project are given below. Storage facility: Even cash flows of $190,000 per year Car wash: $112,800, $143,300, $61,000, $125,000, and $99,000 Required: 1. Calculate the payback period for the storage facility (even cash flows). Round your answer to one decimal place. years 2. Calculate the payback period...

  • Payback Period Payson Manufacturing is considering an investment in a new automated manufacturing system. The new...

    Payback Period Payson Manufacturing is considering an investment in a new automated manufacturing system. The new system requires an investment of $1,200,000 and either has: a. Even cash flows of $400,000 per year or b. The following expected annual cash flows: $150,000, $150,000, $400,000, $400,000, and $100,000 Required: Calculate the payback period for each case. Round your answer to one decimal place. years b. years

  • Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett...

    Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $89,666 per year. Other information about this proposed project follows: Initial investment $419,000 Useful life 8 years $ 44,000 Salvage value Assume straight line depreciation method is used Required: 1. Calculate the accounting rate of return for Bartlett. (Round your percentage answer to 2 decimal places.) Accounting Rate of Return 2. Calculate the payback period for Bartlett. (Round...

  • Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett...

    Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $102,939 per year. Other information about this proposed project follows: Initial investment Useful life Salvage value $478.785 9 years $ 57,000 Assume straight line depreciation method is used. Required: 1. Calculate the accounting rate of return for Bartlett. (Round your percentage answer to 2 decimal places.) Accounting Rate of Return 2. Calculate the payback period for Bartlett. (Round...

  • Bliss Beauty Products is considering an investment in one of two new product lines. The investment...

    Bliss Beauty Products is considering an investment in one of two new product lines. The investment required for either product line is $2,800,000. The net cash flows associated with each product are shown below. Year Shampoo/Conditioner Body Wash 1 $700,000 $400,000 2 650,000 400,000 3 550,000 400,000 4 450,000 400,000 5 450,000 400,000 6 200,000 400,000 7 100,000 400,000 8 100,000 400,000 Total $3,200,000 $3,200,000 a. Recommend a product offering to Bliss Beauty Products, based on the cash payback period...

  • Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income...

    Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $76,785 per year. Other information about this proposed project follows: $369,160 Initial investment 7 years Useful life $ 41,000 Salvage value Assume straight line depreciation method is used Required: 1. Calculate the accounting rate of return for Bartlett. (Round your percentage answer to 2 decimal places.) Accounting Rate of Return 2. Calculate the payback period for Bartlett. (Round...

  • Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net in...

    Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $96,741 per year. Other information about this proposed project follows Initial investment Useful life Salvage value $462,875 9 years $ 41.000 Assume straight line depreciation method is used. Required: 1. Calculate the accounting rate of return for Bartlett (Round your pe answer to 2 decimal places.) Accounting Rate of Return 2. Calculate the payback period for Bartlett. (Round...

  • Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net in...

    Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to increase its net income by $102,939 per year. Other information about this proposed project follows: Initial investment Useful life Salvage value $478.785 9 years $ 57,000 Assume straight line depreciation method is used. Required: 1. Calculate the accounting rate of return for Bartlett. (Round your percentage answer to 2 decimal places.) Answer is complete and correct. Accounting Rate of 21,50 % Return 2....

  • A capital investment project requires an investment of £100,000 and has an expected life of four...

    A capital investment project requires an investment of £100,000 and has an expected life of four years. Annual cash flows, which occur evenly throughout 5 years amount to £45,000 per annum. The net present value of the project using a 12 percent discount rate is Select one: a. £33,732 b. £68,162 c. £62,225 d. £98,980 e. £28,162

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT