A firm evaluates a project with the following cash flows. The firm has a 2 year payback period criteria and a required return of 17 percent. Year Cash flow (OMR) year 0= -39,000 year 1= 28,000 year 2= 19,000 year 3= 14,000 year 4= -12,000 year 5= 10,000 What is the payback period for the project?

A firm evaluates a project with the following cash flows. The firm has a 2 year payback period criteria and a required return of 17 percent. Year Cash flow (OMR) year 0= -39,000 year 1= 28,000 year 2= 19,000 year 3= 14,000 year 4= -12,000 year 5= 10,000 What is the payback period for the project?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 2PA: Jasmine Manufacturing is considering a project that will require an initial investment of $52,000...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

A firm evaluates a project with the following cash flows. The firm has a 2 year payback period criteria and a required return of 17 percent.
Year
Cash flow (OMR)
year 0= -39,000
year 1= 28,000
year 2= 19,000
year 3= 14,000
year 4= -12,000
year 5= 10,000

What is the payback period for the project?

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