Transcribed Image Text
An investment of $100,000 will begin returning $11,600 annuallyat the end of the second year and it will continue at that rate for10 years. If there is no cash inflow in the first year, what is itspayback period?A. 10.6 yearsB. 9.9 yearsC. 9.6 yearsD. 9.2 yearsE. 8.9 yearsSimply Shoes, Inc. is evaluating an expansion that will cost $1million and is expected to generate the following cash flows: year1: – $350,000; year 2: +$450,000; year 3: +$675,000; and year 4:+$800,000.What is the payback period?A. 3.1 yearsB. 3.3 yearsC. 3.4 yearsD. 3.7 yearsE. 4.0 yearsAce Transport is considering the purchase of a new $140,000truck. If the company expects the cash inflows to be $35,000 afterthe first year, $52,000 after the second year, $64,000 after thethird year, and $48,000 after the fourth year, what is the NPV ifthe cost of capital is 8.5%?A. $21,171B. $32,139C. $53,874D. $107,458E. $118,426