An investment project is expected to yield $10,000 in annual revenues, has $2,000 in fixed costs per year, and requires an initial investment of $5,000 . Given a cost of goods sold of 60 percent of sales, what is the payback period in years?
a. 2.50
b. 5.00
c. 2.00
d. 1.25
A
Net cash flow = $10,000 - $6,000 - $2,000
Net cash flow = $2,000
$5,000/$2,000 = 2.50 years
You might also like to view...
Once the petty cash fund is established, an entry is made to Petty Cash each time the amount of the fund is changed
Indicate whether the statement is true or false
Community shopping centers are also known as strip malls.
Answer the following statement true (T) or false (F)
The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the retained earnings account is the:
A) Income Summary account. B) Closing account. C) Balance column account. D) Contra account. E) Nominal account.
Which of the following shares have the right to vote?
A. unissued shares B. treasury shares C. outstanding shares D. liquidated shares