The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year Investment Cash Inflow 1 $ 58,000 $ 4,000 2 $ 8,000 $ 8,000 3 $ 11,000 4 $ 14,000 5 $ 17,000 6 $ 15,000 7 $ 13,000 8 $ 11,000 9 $ 10,000 10 $ 10,000 Required: 1. Determine the payback period of the investment. 2. Would the payback period be affected if the cash inflow in the last year were several times as large?
The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year Investment Cash Inflow 1 $ 58,000 $ 4,000 2 $ 8,000 $ 8,000 3 $ 11,000 4 $ 14,000 5 $ 17,000 6 $ 15,000 7 $ 13,000 8 $ 11,000 9 $ 10,000 10 $ 10,000 Required: 1. Determine the payback period of the investment. 2. Would the payback period be affected if the cash inflow in the last year were several times as large?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 6EB: The management of Ryland International Is considering Investing in a new facility and the following...
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The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows:
Year | Investment | |||
1 | $ | 58,000 | $ | 4,000 |
2 | $ | 8,000 | $ | 8,000 |
3 | $ | 11,000 | ||
4 | $ | 14,000 | ||
5 | $ | 17,000 | ||
6 | $ | 15,000 | ||
7 | $ | 13,000 | ||
8 | $ | 11,000 | ||
9 | $ | 10,000 | ||
10 | $ | 10,000 | ||
Required:
1. Determine the payback period of the investment.
2. Would the payback period be affected if the cash inflow in the last year were several times as large?
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