Chapter 12, Problem 4MCQ

### Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

Chapter
Section

### Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
5 views

# An investment of $6,000 produces a net annual cash inflow of$2,000 for each of 5 years. What is the payback period? a. 2 years b. 1.5 years c. Unacceptable d. 3 years e. Cannot be determined

To determine

Find out the payback period where the investment is of $6,000 and net annual cash inflow is$2,000.

Explanation

Payback Period:

The time taken by an investment to recover its original value is known as payback period. It is calculated by dividing the original amount of investment by annual cash flow from the investment.

Use the following formula to calculate payback period:

Paybackperiod=OriginalinvestmentAverageann

### Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

#### The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started