Solution-Compute the cash payback period

Compute the cash payback period

Reference no: EM133176646

Question - Vilas Company is considering a capital investment of $180,000 in additional productive facilities. The new machinery is expected to have a useful life of 5 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $9,990 and $45,000, respectively. Vilas has a 12% cost of capital rate, which is the required rate of return on the investment.

Required -

a) Compute the cash payback period. Compute the annual rate of return on the proposed capital expenditure.

b) Using the discounted cash flow technique, compute the net present value.

Reference no: EM133176646

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Compute the cash payback period

Reference no: EM133176646

Reference no: EM133176646

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