(Ignore income taxes in this problem.) The management of Helberg Corporation is
ID: 2416297 • Letter: #
Question
(Ignore income taxes in this problem.) The management of Helberg Corporation is considering a project that would require an investment of $185,000 and would last for 6 years. The annual net operating income from the project would be $102,000, which includes depreciation of $19,000. The scrap value of the project's assets at the end of the project would be $25,300. The cash inflows occur evenly throughout the year. The payback period of the project is closest to
(Ignore income taxes in this problem.) The management of Helberg Corporation is considering a project that would require an investment of $185,000 and would last for 6 years. The annual net operating income from the project would be $102,000, which includes depreciation of $19,000. The scrap value of the project's assets at the end of the project would be $25,300. The cash inflows occur evenly throughout the year. The payback period of the project is closest to
Explanation / Answer
Initial investment 185,000 Net operation income 102,000 Add: depreciation 19,000 Cashflow 121,000 Payback period= 185000/121000 1.53 years
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