Question
Exercise 14-1 (Algo) Payback Method [LO14-1] The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows Year
Exercise 14-1 (Algo) Payback Method [LO14-1]
The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows
| Year | Investment | Cash Inflow |
|---|---|---|
| 1 | $ 61,000 | $ 3,000 |
| 2 | $ 5,000 | $ 6,000 |
| 3 | $ 12,000 | |
| 4 | $ 13,000 | |
| 5 | $ 16,000 | |
| 6 | $ 10,000 | |
| 7 | $ 8,000 | |
| 8 | $ 10,000 | |
| 9 | $ 9,000 | |
| 10 | $ 9,000 |
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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Accounting, The Financial Chapters
Authors: Tracie Miller Nobles
12th Edition
013449041X, 9780134490410
