A machine costing P8,350 yields total cash flows of P.13,100 over 5 years. The following pertains to the annual cash flows using the machine: Year Net Cash inflows 1 P1,750 2 2,250 3 2,850 4 3,000 5 3,250 Compute for the company's payback reciprocal.

A machine costing P8,350 yields total cash flows of P.13,100 over 5 years. The following pertains to the annual cash flows using the machine: Year Net Cash inflows 1 P1,750 2 2,250 3 2,850 4 3,000 5 3,250 Compute for the company's payback reciprocal.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A machine costing P8,350 yields total cash flows of P.13,100 over 5 years. The following pertains to the annual cash flows using the machine:

Year	Net Cash inflows
1	P1,750
2	2,250
3	2,850
4	3,000
5	3,250

Compute for the company's payback reciprocal.

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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