Question
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
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 | $ | 54,000 | $ | 5,000 |
| 2 | $ | 7,000 | $ | 10,000 |
| 3 | $ | 16,000 | ||
| 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.
2. Would the payback period be affected if the cash inflow in the last year were several times as large?
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Managerial Accounting An Introduction to Concepts Methods and Uses
Authors: Michael W. Maher, Clyde P. Stickney, Roman L. Weil
10th Edition
1111822239, 324639767, 9781111822231, 978-0324639766
