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 7-1 Payback Method L07-1 The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year Investment Cash Inflow 1. $15,000 $8,000 N 7 + LO O N O $1,000 $2,000 $2,500 $4,000 $5,000 $6,000 $5,000 $4,000 $3,000 $2,000 8 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