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 | $ | 60,000 | $ | 2,000 |
| 2 | $ | 4,000 | $ | 4,000 |
| 3 | $ | 8,000 | ||
| 4 | $ | 9,000 | ||
| 5 | $ | 12,000 | ||
| 6 | $ | 10,000 | ||
| 7 | $ | 8,000 | ||
| 8 | $ | 5,000 | ||
| 9 | $ | 4,000 | ||
| 10 | $ | 4,000 | ||
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 Regulation In Europe
Authors: McLeay Stuart
1st Edition
0333694600, 9780333694602
