Pam's Company estimates the following cash flows and depreciation on a project that will cost $200,000 and will last 10 years with no salvage value: Sales revenue $80,000 Salary expense $32,000 Depreciation expense 20,000 Miscellaneous expenses 8,000 Net Income $20,000 Instructions (a) Calculate the expected annual rate of return on this project showing calculations to support your answer. (b) Calculate the cash payback on this project showing calculations to support your answer.
Pam's Company estimates the following cash flows and depreciation on a project that will cost $200,000 and will last 10 years with no salvage value:
Sales revenue $80,000
Salary expense $32,000
Depreciation expense 20,000
Miscellaneous expenses 8,000
Net Income $20,000
Instructions
(a) Calculate the expected annual
(b) Calculate the cash payback on this project showing calculations to support your answer.
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