3. A company is considering investing £46,000 in a machine that will be operated for 4 years, after which time it will sell for £4,000. Depreciation is charged on a straight line basis. Forecast operating cashflows are £28,000, £35,000, £25,000 and £9,000.
What is the Payback Period and the ARR based on average investment?
PP
ARR
A
1.5 years
52%
B
2.4 years
55%
C
D
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