What is the payback period for project

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Reference no: EM132066003

A proposed project will generate £150,000 in revenue a year for 20 years (starting next year), but will cause another product line to lose £60,000 in revenue a year during that time. The project will make use of 50% of an already leased warehouse with total annual rent of£50,000 (the contract does not prohibit sub-leasing). The discount rate for this project is 6%. Should the firm undertake this project if the required investment is £250,000? What is the Payback Period for this project?

Reference no: EM132066003

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