Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Beyer Company is considering the purchase of an asset for $190,000. It is expected to produce the following net cash flows. The cash flows occur
Beyer Company is considering the purchase of an asset for $190,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year.
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Total | |||||||||||||||||||
Net cash flows | $ | 50,000 | $ | 31,000 | $ | 60,000 | $ | 140,000 | $ | 30,000 | $ | 311,000 | ||||||||||||
Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal place.)
Cumulative Net Cash inflow Year Cash Inflow (Outflow) (Outflow) (190,000) $ $ (190,000) 0 (140,000) 50,000 2 31,000 (109,000) (49,000) 3 60,000 140,000 4 91,000 30,000 3.35 years Payback period = LOStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started