Question
The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year Investment Cash Inflow 1 $ 53,000
The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows:
| Year | Investment | Cash Inflow |
|---|---|---|
| 1 | $ 53,000 | $ 3,000 |
| 2 | $ 3,000 | $ 6,000 |
| 3 | $ 14,000 | |
| 4 | $ 15,000 | |
| 5 | $ 18,000 | |
| 6 | $ 16,000 | |
| 7 | $ 14,000 | |
| 8 | $ 12,000 | |
| 9 | $ 11,000 | |
| 10 | $ 11,000 |
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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Management Accounting For Decision Makers
Authors: Dr Peter Atrill, Eddie McLaney
6th Edition
0273731521, 9780273731528
