FINANCIAL & MANAGERIAL ACCOUNTING (ACCES
FINANCIAL & MANAGERIAL ACCOUNTING (ACCES
9th Edition
ISBN: 9781265484040
Author: Wild
Publisher: MCG
Question
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Chapter 24, Problem 1QS
To determine

Investment decision:

Investment decision can be referred to as capital budgeting. It involves finding solutions to questions like whether to add to capital assets today will increase the revenues of tomorrow to cover costs.

The payback period of the investment.

Expert Solution & Answer
Check Mark

Answer to Problem 1QS

Solution:

The payback period of the investment is 3 years.

Explanation of Solution

Calculate the payback period as shown below.

    Paybackperiod=TotalinvestmentAmountinvested=$27,000$9,000=3years

Therefore, the payback period is 3 years.

Conclusion

Hence, the payback period of the investment is 3 years.

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