8. Clara operates a specialized financial services business in Toronto. She's currently considering purchasing an exclusive service agreement from a competitor for $110,000, but would like to ensure...



8.Clara operates a specialized financial services business in Toronto. She's currently considering purchasing an exclusive service agreement from a competitor for $110,000, but would like to ensure that the investment would meet her payback rule of five years. The service agreement would guarantee net returns of $32,000 per year, but would also require her to pay $15,000 for a regulatory audit every other year (starting from the first year).



a. What is the payback period on this investment?



year(s)? month(s)?


b.Does this investment satisfy Clara's payback rule


Yes/No



Kindly keep all the decimals for all the procedures, DO NOT ROUND



Jun 09, 2022
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