Logy Ltd Is Evaluating Two Possible Investments in Depreciable Plant

Multiple Choice

Logy Ltd is evaluating two possible investments in depreciable plant assets.The company uses the straight-line method of depreciation.The following information is available:
$\begin{array}{|l|c|c|}\hline & \text { Investment A } & \text { Investment B } \\\hline \text { Initial capital investment } & \$ 104,000 & \$ 156,000 \\\hline \text { Estimated useful life } & 10 \text { years } & 10 \text { years } \\\hline \text { Estimated residual value } & 0& \$ 30,000 \\\hline \text { Eistimated anunual net cash inflow for } 10 \text { years } & \$ 23,000 & \$ 46,000 \\\hline\text { Required rate of return }&12\%&12\%\\\hline\end{array}$

Calculate the payback period for Investment B.

A) 3.57 years
B) 4.43 years
C) 1.96 years
D) 3.69 years