Question

oriental corporation has gathered the following data on a proposed investment project: investment in depreciable equipment $ 690,000 annual net cash flows $ 76,000 life of the equipment 16 years salvage value $ 0 discount rate 6% the company uses straight-line depreciation on all equipment. assume cash flows occur uniformly throughout a year except for the initial investment. the payback period for the investment would be: (round your answer to 1 decimal place.)

Answer 1

9.85 years

Explanation:

Below is a formula and computation of the payback period.

Initial investment minus annual net cash flows is the payback time.

= $650,000 ÷ $66,000

= 9.85 years

The payback period is calculated by dividing the initial investment by the annual net cash flows, and the same is depicted here.

What is Oriental corporation ?

In 1842, a British imperial bank called the Oriental Bank Corporation (Chinese: ), sometimes known as the "OBC," was established in India. It quickly gained notoriety throughout the Far East. The OBC was a bank that specialized in currency exchanges, hence its main focus was on financing international trade. It was the initial financial institution to open in Hong Kong and the first to print banknotes there.

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