What is cash payback period for project xr8

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Reference no: EM13509253

Roger Industries is considering two capital investment proposals. Estimates regarding each project are provided below:


Project XR8
Project AAA
Initial investment $800,000
$1,200,000
Annual net income 40,000
84,000
Net annual cash inflow 200,000
284,000
Estimated useful life 5 years
6 years
Salvage value 0
0


The company requires a 10% rate of return on all new investments.

Present Value of an Annuity of 1

Periods
9%
10%
11%
12%
5
3.890
3.791
3.696
3.605
6
4.486
4.355
4.231
4.111



The cash payback period for Project XR8 is

 


10 years.


4 years.


5 years.


20 years.

 

Reference no: EM13509253

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