Payback Method [LO5]

The management of Weimar, Inc., a civil engineering design company, is considering an investment in a high-quality blueprint printer with the following cash flows:

Year Investment Cash Infl ow 1 . . . . . . . $38,000 $2,000 2 . . . . . . . $6,000 $4,000 3 . . . . . . . $8,000 4 . . . . . . . $9,000 5 . . . . . . . $12,000 6 . . . . . . . $10,000 7 . . . . . . . $8,000 8 . . . . . . . $6,000 9 . . . . . . . $5,000 10 . . . . . . . $5,000 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 larger?