Question
Consider an investment with an initial cost of $15,000 and is expected to last for 5 years. The expected cash flow in years 1 and
Consider an investment with an initial cost of $15,000 and is expected to last for 5 years. The expected cash flow in years 1 and 2 are $5,000, in years 3 and 4 are $5,500 and in year 5 is $1,000. Compute the payback period in years.
| a. | 2.91 years | |
| b. | 3.37 years | |
| c. | 3.81 years | |
| d. | 4.22 years | |
| e. | 4.53 |
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Horngrens Financial and Managerial Accounting
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
5th edition
978-0133866292
