MANAGERIAL ACCT.F/MANAGERS>CUSTOM<
MANAGERIAL ACCT.F/MANAGERS>CUSTOM<
4th Edition
ISBN: 9781307090147
Author: Noreen
Publisher: MCG/CREATE
Question
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Chapter 8, Problem 8.1E

1.

To determine

Concept Introduction:

The payback period is one of the techniques of capital budgeting which helps to identify the financial viability of the project. The payback period is the period under which the project can recover its initial cost. For example, if the initial cost of the project is $100 and it earns annual cash flows $20, the payback period of the project shall be 100/20 = 5 years.

the payback period for the investment.

2.

To determine

Concept Introduction:

The payback period is one of the techniques of capital budgeting which helps to identify the financial viability of the project. The payback period is the period under which the project can recover its initial cost. For example, if the initial cost of the project is $100 and it earns annual cash flows $20, the payback period of the project shall be 100/20 = 5 years.

the effect on payback period is the last year’s cash flow is increased.

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