Consider the following cash flows: Year Cash Flow -$4,800 1,400 2,500 1,200 900 What is the payback period for the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) 01234

Consider the following cash flows: Year Cash Flow -$4,800 1,400 2,500 1,200 900 What is the payback period for the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) 01234

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 15DQ

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

Consider the following cash flows:
Cash Flow
-$4,800
1,400
2,500
1,200
900
Year
What is the payback period for the cash flows? (Do not round intermediate calculations
and round
answer to 2 decimal places, e.
32.16.)
Payback period
years
-23 4

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