What is the payback period for project

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Reference no: EM131916997

McGilla Golf has decided to sell a new line of golf clubs. The length of this project is seven years. The company has spent $170528 on research and development for the new clubs. The plant and equipment required will cost $2803574 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $127965 that will be returned at the end of the project. The annual OCF of the project will be $809106. The tax rate is 32 percent, and the cost of capital is 8 percent. What is the payback period for this project?

Reference no: EM131916997

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