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Business, 06.05.2020 00:37 SKYBLUE1015

6. Yates, 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 $275,000 $225,000 Estimated useful life 8 years 7 years Estimated residual value $15,000 $20,000 Estimated annual net cash inflow for 10 years $55,000 $35,000 Required rate of return 12% 12% Compute the payback period for each investment. Based on the information presented, which appears to be the better investment and why? Show your calculations and round to one decimal place. (You don’t need to use all the information.)

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6. Yates, Inc. is evaluating two possible investments in depreciable plant assets. The company uses...
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