Chap 13 EXR Quest 1

The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows:

Year	Investment		Cash Inflow
1	$	78,000	$	5,000
2	$	5,000	$	10,000
3			$	12,000
4			$	15,000
5			$	18,000
6			$	16,000
7			$	14,000
8			$	12,000
9			$	11,000
10			$	11,000

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 as large?

Required 1

Determine the payback period of the investment. (Round your answer to 1 decimal place.)

Payback period

years

Required 2

Would the payback period be affected if the cash inflow in the last year were several times as large?

	Yes No