Kenny Company is considering the possibility of investing $1,500,000 in a special project. This venture will return $375,000 per year for 12 years in after tax cash flows
Depreciation on the project will be $187,500 per year using straight-line depreciation. The payback period for the project is:
A. 6 years.
B. 12 years.
C. 4 years.
D. 2 years.
C
$1,500,000/$375,000 = 4 years
Business
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