Payback Method

The management of Deitrich Inc., a civil engineering design company, is considering an investment in a high-quality blueprint printer with the following cash flows:

YearInvestmentCash Inflow

1 $28,000$2,000

2 $4,000$3,000

3$6,000

4$8,000

5$9,000

6$8,000

7$6,000

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 was several times larger?

Answer rating: 100% (QA)

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