The management of Kawneer North America is consideringinvesting in a new facility and the following cash flows areexpected to result from the investment:YearCash OutflowCash Inflow1$1,900,000$100,000545,000200,0003365,0004480,0005505,0006.600,0007590,0008.295,0009.250,00010250,000A. What is the payback period of this uneven cash flow?Round your answer to 2 decimal places.yearsB. Does your answer change if year 10's cash inflowchanges to $500,000?The answer for part Aif the cash inflow inyear 10 changes to $500,000.

Payback period is the length of time that is required to recover the initial outlay on a business…

Answered: A. What is the payback period of this…

A. What is the payback period of this uneven cash flow? Round your answer to 2 decimal places. years B. Does your answer change if year 10's cash inflow changes to $500,000?

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

The management of Kawneer North America is considering
investing in a new facility and the following cash flows are
expected to result from the investment:
Year
Cash Outflow
Cash Inflow
1
$1,900,000
$100,000
545,000
200,000
3
365,000
4
480,000
5
505,000
6.
600,000
7
590,000
8.
295,000
9.
250,000
10
250,000
A. What is the payback period of this uneven cash flow?
Round your answer to 2 decimal places.
years
B. Does your answer change if year 10's cash inflow
changes to $500,000?
The answer for part A
if the cash inflow in
year 10 changes to $500,000.

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