Response to the following :
Unadjusted Rate of Return Method
Refer to the data in problem. What is the unadjusted rate of return on the investment?
Note: The investment is expected to have a useful life of 10 years, and the company uses straight-line depreciation with zero salvage value.
Problem:
Payback Method
The company paid $50,000 cash for a capital investment. The company expects the investment to generate net cash inflows of $8,400 per year. What is the payback period of this investment?