What is the payback period for kapatid corporation

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Reference no: EM132972560

Problem 1: Kapatid Corporation is considering an investment in new equipment costing Php 77,500. The equipment will be depreciated on a straight-line basis over a five-year life and is expected to generate net cash inflows of Php 22,500 the first year; Php 32,500 the second year; and Php 45,000 every year thereafter until the fifth year. What is the payback period?

Select one:

a. 1.72 year

b. 1.25 year

c. 0.86 year

d. 1.02 year

Reference no: EM132972560

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