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What is the payback reciprocal of the investment

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Q1. The Bokawkan Company is considering to purchase a new machine. Annual cash returns on investment cost of P1,200,000 is expected to be at P220,000. Useful is estimated at 8 years. The company's cost of capital is 14% and income tax rate is 35%. What is the payback reciprocal of the investment?

A. 20.5%

B. 18.3%

C. 11.9%

D. 22.2%

Q2. An investment project has the following characteristics: Cost, P22,820; Annual cash inflows, P5,000; internal rate of return, 12%. What is the useful life of the project?

A. 2 points

B. 7 years

C. 12 years

D. 4.56 years.

Reference no: EM133079829

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