Minor Company Is Going to Invest in a New Product

Multiple Choice

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