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An investment of $250,500 is expected to generate the following cash inflows during the next 6 years. Years Cash Inflows ($) 1 70,000 2 85,000
An investment of $250,500 is expected to generate the following cash inflows during the next 6 years.
Years | Cash Inflows ($) |
1 | 70,000 |
2 | 85,000 |
3 | 55,525 |
4 | 72,890 |
5 | 65,250 |
6 | 78,990 |
Decide whether the investment should done, taking into consideration the management expectation to recover the initial investment in 3 years or less. Use the payback period method in order to support your decision.
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