(Answered) Question - logan inc is evaluating two possible investments

Accounting

Question - Logan, Inc. is evaluating two possible investments in depreciable plant assets. The company uses the straight-line method of depreciation. The following information is available:

	Investment A	Investment B
Initial capital investment	$102,000	$150,000
Estimated useful life	10 years	10 years
Estimated residual value	0	$23,000
Estimated annual net cash inflow for 10 years	$20,000	$46,000
Required rate of return	10%	14%

Calculate the payback period for Investment A. (Round your answer to two decimal places.)

(a) 3.04 years

(b) 3.95 years

(d) 5.10 years

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