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Chapter 11 Exercise A6 The management of Kawneer North America is considering investing in a new facility and the following cash flows are expected to
| Chapter 11 Exercise A6 | |||||||||||
| The management of Kawneer North America is considering investing in a new facility and the following cash flows are expected to result from the investment: | |||||||||||
| Year | Cash Outflow | Cash Inflow | |||||||||
| 1 | $1,900,000 | $100,000 | |||||||||
| 2 | 550,000 | 200,000 | |||||||||
| 3 | 360,000 | ||||||||||
| 4 | 480,000 | ||||||||||
| 5 | 510,000 | ||||||||||
| 6 | 600,000 | ||||||||||
| 7 | 590,000 | ||||||||||
| 8 | 300,000 | ||||||||||
| 9 | 250,000 | ||||||||||
| 10 | 250,000 | ||||||||||
| A. What is the payback period of this uneven cash flow? | |||||||||||
| B. Does your answer change if year 10's cash inflow changes to $500,000? | |||||||||||
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Intermediate Accounting 2014 FASB Update
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
15th edition
978-1118938782, 111893878X, 978-1118985311, 1118985311, 978-1118562185, 1118562186, 978-1118147290
