EB6. LO 11.2 The management of Ryland International is considering investing in a new facility and the following cash flows are expected to result from the investment: Year Cash Outflow Cash Inflow $ 700,000 $200,000 2 2,100,000 400,000 3 260,000 4 360,000 5 260,000 6 800,000 7 480,000 8 400,000 420,000 420,000 9. 10 A. What is the payback period of this uneven cash flow? B. Does your answer change if year 6’s cash inflow changes to $920,000?

Question
EB6. LO 11.2 The management of Ryland International is considering investing in a new
facility and the following cash flows are expected to result from the investment:
Year
Cash Outflow
Cash Inflow
$ 700,000
$200,000
2
2,100,000
400,000
3
260,000
4
360,000
5
260,000
6
800,000
7
480,000
8
400,000
420,000
420,000
9.
10
A. What is the payback period of this uneven cash flow?
B. Does your answer change if year 6’s cash inflow changes to $920,000?
Expand
Transcribed Image Text

EB6. LO 11.2 The management of Ryland International is considering investing in a new facility and the following cash flows are expected to result from the investment: Year Cash Outflow Cash Inflow $ 700,000 $200,000 2 2,100,000 400,000 3 260,000 4 360,000 5 260,000 6 800,000 7 480,000 8 400,000 420,000 420,000 9. 10 A. What is the payback period of this uneven cash flow? B. Does your answer change if year 6’s cash inflow changes to $920,000?

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