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Waterman Publishing is considering the purchase of a used printing press costing $38,400. The printing press would generate a net cash inflow of $16,000 a year for 3 years. At the end of 3 years, the press would have no salvage value. The company's cost of capital is 10 percent. The company uses straight-line depreciation. The project's accounting (simple) rate of return (rounded to the nearest percent) on the initial investment is closest to: 8.3 percent 10 percent 42 percent 75 percent The investment's payback period in years (rounded to two decimal points) is

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9990346

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