Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Investment Cash Inflow $ 5,000 $ 10,000 $ 16,000 $ 17,000 $ 20,000 $ 18,000 Year 1 2 3 4 5 6 7 8 9 10 $ 54,000 $ 7,000 $ 16,000 $ 14,000 $ 13,000 $ 13,000 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?

Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Investment Cash Inflow $ 5,000 $ 10,000 $ 16,000 $ 17,000 $ 20,000 $ 18,000 Year 1 2 3 4 5 6 7 8 9 10 $ 54,000 $ 7,000 $ 16,000 $ 14,000 $ 13,000 $ 13,000 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?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter12: Capital Investment Decisions

Section: Chapter Questions

Problem 21BEA

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