(Ignore income taxes in this problem.) Limon Corporation is considering a projec
ID: 2530357 • Letter: #
Question
(Ignore income taxes in this problem.) Limon Corporation is considering a project that would require an initial investment of $212,500 and would last for 5 years. The incremental annual revenues and expenses for each of the 5 years would be as follows:
(Ignore income taxes in this problem.) Limon Corporation is considering a project that would require an initial investment of $212,500 and would last for 5 years. The incremental annual revenues and expenses for each of the 5 years would be as follows:
Explanation / Answer
Payback period = Initial investment/Annual net cash flow
Annual net cash flow = 92100+35500 = 127600
Payback period = 212500/127600 = 1.67 years
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