What is the payback period for Project A? (Assume that the company uses the straight-line depreciation method.) (Round your answer to two decimal places.)
A company is evaluating three possible investments. The following information is provided by the company:
A) 2.87 years
B) 1.59 years
C) 3.87 years
D) 5.00 years
C) 3.87 years
Payback period = Amount invested / Expected annual net cash flow = $240,000 / $62,000 = 3.87 years
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What will be an ideal response?