Rego and Associates plans to invest $1,200,000 in modernizing their call centers. They...
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Rego and Associates plans to invest $1,200,000 in modernizing their call centers. They expect productivity to increase and generate 8,000 more billable hours annually. The current bill rate is $50 per hour. Rego and Associates does not include depreciation or taxes when computing payback or accounting rate of return. The effect of the investment on productivity will last for over five years, although the effects become harder to predict for beyond five years. The company uses a discount factor of 10% on its capital projects. Required: a. What is the payback period on this project? years b. What is the modified payback period on this project? (Use Table 1 from Appendix B, and round your final answer to 2 decimal places, e.g. 5.25 years.) years c. What is the project's accounting rate of return? Ignore taxes. (Round your answer to two decimal places, e.g. 58.74%.) olo
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