Question
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
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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Inventory Best Practices
Authors: Steven M. Bragg
2nd Edition
1118000749, 9781118000748
