Minor Company is going to invest in a new product line.Minor estimates that the net cash flows from the new line will be $25,000 per year.The initial investment required to implement the new line will be $500,000.The company requires a rate of return of 8% and the new product line is expected to span a time period of 15 years.What is the payback period of the new product line?
A)1.6 years
B)12.5 years
C)20 years
D)25 years

Question

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The Answer of Minor Company is going to invest in a new product line.Minor estimates that the net cash flows from the new line will be $25,000 per year.The initial investment required to implement the new line will be $500,000.The company requires a rate of return of 8% and the new product line is expected to span a time period of 15 years.What is the payback period of the new product line?
A)1.6 years
B)12.5 years
C)20 years
D)25 years

Minor Company Is Going to Invest in a New Product