Exercise 13-1 Payback Method [LO13-1]

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

Year	Investment	Cash Inflow
1	$66,000	$5,000
2	$6,000	$10,000
3		$20,000
4		$17,000
5		$20,000
6		$18,000
7		$16,000
8		$14,000
9		$13,000
10		$13,000

Required:
1.	Determine the payback period of the investment. (Round your answer to 1 decimal place.) Payback period ______ (years)

2.

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

	Yes
	No