Question
The Acme Birdseed Company is considering expansion into a new line of business. With an investment today of $1,000,000 they can begin selling roadrunner capture
The Acme Birdseed Company is considering expansion into a new line of business. With an investment today of $1,000,000 they can begin selling roadrunner capture devices. These devices are expected to produce net cash flows in future periods in the following amounts:
Year 1 - $100,000
Year 2 - $200,000
Year 3 - $400,000
Year 4 - $600,000
Year 5 - $600,000
Assume that net cash flows occur at the end of each period and that this project produces no additional costs or revenues beyond year 5.
What is the un-discounted payback period of this project? Round your answer to the nearest whole dollar amount.
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