Question
The Gladwell Company has received information about a new investment opportunity. The project will require several staggered investments over the first couple of years, but
The Gladwell Company has received information about a new investment opportunity. The project will require several staggered investments over the first couple of years, but should provide a substantial return in later years. Management has asked how long it will take to payback the initial investment given the following expected returns.
| Period | Outflows | Inflows |
| Year 1 | $29,882 | $2,473 |
| Year 2 | $25,441 | $4,966 |
| Year 3 | $19,133 | $10,184 |
| Year 4 | $20,373 | |
| Year 5 | $25,264 | |
| Year 6 | $29,772 | |
| Year 7 | $50,617 |
What is the payback period on this investment? Your answer should be specified to two decimals.
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Production And Operations Analysis
Authors: Steven Nahmias, Tava Lennon Olsen
7th Edition
1478623063, 9781478623069
