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What would be the simple rate of return on the investment

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Reference no: EM132603357

The Stanford Company has gathered the following data on a proposed investment project:

Investment in Depreciable Equipment          $200,000

Annual Net Cash Flows                             $ 50,000

Life of the Equipment                               10 years

Salvage Value                                               -0-

Discount Rate                                                10%

The company uses straight-line depreciation on all equipment. (Ignore income taxes in this problem.)

Question A. What would be the payback period for the investment?

Question B. What would be the simple rate of return on the investment?

Question C. What would be the net present value of this investment?

Reference no: EM132603357

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