Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. flower unlimited is considering purchasing an addi

Flower unlimited is considering purchasing an additional delivery truck that will have seven-year useful life. The...

Free

50.1K

Verified Solution

Question

Finance

Flower unlimited is considering purchasing an additionaldelivery truck that will have seven-year useful life. The new truckwill cost $42,000. Cost savings with this truck are expected to be$12,800 for the first two years, $8,900fo the following two years,and $5000 for the last three years of the truck’s useful life. Whatis the payback period for this project? What is discounted paybackperiod for this project with a discount rate of 10 percent?

please provide formula

Answer & Explanation Solved by verified expert
4.2 Ratings (778 Votes)

Payback period= Full years until recovery + unrecovered cost at the start of the year/cash flow during the year

Payback method= 3 years + $7,500/ $8,900

                           = 3 years+ 0.84

                            = 3.84 years.

Discounted payback method= 6 years + 1,092.67/ 2,565.68

                                             = 6 years + 0.43

= 6.43 years.

In case of any query, kindly comment on the solution.
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Flower unlimited is considering purchasing an additionaldelivery truck that will have seven-year useful life. The new truckwill cost $42,000. Cost savings with this truck are expected to be$12,800 for the first two years, $8,900fo the following two years,and $5000 for the last three years of the truck’s useful life. Whatis the payback period for this project? What is discounted paybackperiod for this project with a discount rate of 10 percent?please provide formula

Other questions asked by students

Q

Note: This problem is for the 2018 tax year. Lance H. and Wanda B. Dean are married...

Accounting
Q

12 Give a proof You will use all of the blanks Given OLENS and ONGTH...

Geometry
Q

Consider the quadratic function f x x 2x 3 Determine the following enter all numerical...

Geometry
Q

Vector A is transformed to vector B Identify the transformation B 54 5 5 4...

Geometry
Q

12a^3p^4 -2a^2p-6a^3p^5-24ap^3-6ap^36a^5p^3

Basic Math
Q

Parkers basis in his PQ Partnership interest is $180,000. Parker receives a pro rata liquidating...

Accounting
Q

On September 1, ABC advertising agency (a Corporation) receives $1,200 from its client XYZ Corporation...

Accounting
Q

Which of the following are internal controls around cash? 1.Mandatory vacations. ll. Bank reconciliations. Ill....

Accounting
Q

Please help me work out this problem Problem 5.2 Before 2005,...

Accounting
Q

The common stock of Jordan's Jalopies Inc. will pay an annual dividend of $3.40 a...

Accounting
Q

Calculate the net present value (NPV) of the above project using the cost of capital...

Finance
Q

please check and give answer As with all audit procedures, auditors must pay...

Accounting