Question
The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year Investment Cash Inflow 1 $ 61,000
The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows:
| Year | Investment | Cash Inflow | ||
| 1 | $ | 61,000 | $ | 3,000 |
| 2 | $ | 5,000 | $ | 6,000 |
| 3 | $ | 12,000 | ||
| 4 | $ | 13,000 | ||
| 5 | $ | 16,000 | ||
| 6 | $ | 10,000 | ||
| 7 | $ | 8,000 | ||
| 8 | $ | 10,000 | ||
| 9 | $ | 9,000 | ||
| 10 | $ | 9,000 | ||
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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Auditing and Assurance services an integrated approach
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
16th edition
978-0134075754, 134075757, 134065824, 978-0134065823
