The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year Investment Cash Inflow 1 $ 61,000 $ 3,000 2 $ 5,000 $ 6,000 3 $ 12,000 4 $ 13,000 5 $ 16,000 6 $ 10,000 7 $ 8,000 8 $ 10,000 9 $ 9,000 10 $ 9,000 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 $ 61,000 $ 3,000 2 $ 5,000 $ 6,000 3 $ 12,000 4 $ 13,000 5 $ 16,000 6 $ 10,000 7 $ 8,000 8 $ 10,000 9 $ 9,000 10 $ 9,000 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?
Fundamentals of Financial Management (MindTap Course List)
14th Edition
ISBN:9781285867977
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter12: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 17P: EQUIVALENT ANNUAL ANNUITY A firm has two mutually exclusive investment projects to evaluate; both...
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Exercise 14-1 (Algo) Payback Method [LO14-1]
The management of Unter Corporation, an architectural design firm, is considering an investment with the following
| Year | Investment | |
|---|---|---|
| 1 | $ 61,000 | $ 3,000 |
| 2 | $ 5,000 | $ 6,000 |
| 3 | $ 12,000 | |
| 4 | $ 13,000 | |
| 5 | $ 16,000 | |
| 6 | $ 10,000 | |
| 7 | $ 8,000 | |
| 8 | $ 10,000 | |
| 9 | $ 9,000 | |
| 10 | $ 9,000 |
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?
![Exercise 14-1 (Algo) Payback Method [LO14-1]
The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows:
Year
Investment
Cash Inflow
$ 61,000
$ 5,000
$ 3,000
$ 6,000
$ 12,000
$ 13,000
$ 16,000
$ 10,000
$ 8,000
$ 10,000
$ 9,000
$ 9,000
2
3
4
7
8.
9.
10
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?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Determine the payback period of the investment. (Round your answer to 1 decimal place.)
Payback period
years
< Required 1
Required 2 >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F16afad9b-824d-42b7-9e40-175f68ea31da%2Fdeed7780-c6d3-463e-8423-dabd10fe6718%2Fdsx9jf_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 14-1 (Algo) Payback Method [LO14-1]
The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows:
Year
Investment
Cash Inflow
$ 61,000
$ 5,000
$ 3,000
$ 6,000
$ 12,000
$ 13,000
$ 16,000
$ 10,000
$ 8,000
$ 10,000
$ 9,000
$ 9,000
2
3
4
7
8.
9.
10
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?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Determine the payback period of the investment. (Round your answer to 1 decimal place.)
Payback period
years
< Required 1
Required 2 >
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