1 2 Tillys Travel Service has made an investment in certain

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Tilly\'s Travel Service has made an investment in certain equipment that cost the company $324,600. The equipment is expected to generate cash inflows of $50,000 each year. Required: Use your financial calculator or excel to determine how many years the equipment will have to be used in order to provide the company with a 11% return on its investment.

Solution

1. It Will take 7.2 Years to Achieve the target.

	$
Investment	324600
11% Return on investment	35706
Total reuired inflow	360306
Inflow of One Year	50000
Years reuired to achieve the target	7.2