The management of Kawneer North America is considering investing in a new facility and the following cash flows are expected to result from the investment:YearCash OutflowCash Inflow1$1,900,000 $105,000 2555,000 205,000 3 355,000 4 475,000 5 505,000 6 595,000 7 590,000 8 295,000 9 255,000 10 255,000 A. What is the payback period of this uneven cash flow? Round your answer to 2 decimal places.fill in the blank 1 yearsB. Does your answer change if year 10's cash inflow changes to $500,000?The answer for part A if the cash inflow in year 10 changes to $500,000.

Payback period is a capital budgeting technique in which it is ascertained that when the entire…

Answered: The management of Kawneer North America…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 6EA: The management of Kawneer North America is considering investing in a new facility and the following...

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The management of Kawneer North America is considering investing in a new facility and the following cash flows are expected to result from the investment:

Year	Cash Outflow	Cash Inflow
1	$1,900,000	$105,000
2	555,000	205,000
3		355,000
4		475,000
5		505,000
6		595,000
7		590,000
8		295,000
9		255,000
10		255,000

A. What is the payback period of this uneven cash flow? Round your answer to 2 decimal places.

fill in the blank 1 years

B. Does your answer change if year 10's cash inflow changes to $500,000?

The answer for part A

if the cash inflow in year 10 changes to $500,000.

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