An investment that would require an initial cash outflow of $360,000 at the beginning is expected to produce cash inflows of $70,000 at the end of each of the investment's 7 years. Assume the required return is 13% and you wanted to determine the investment's discounted paypack period. What amount would you subtract from the investment's initial cash outflow of $360,000 when determining how much of the initial cost would be left to recover on a discounted basis at the beginning of the second year?
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An investment that would require an initial
Data given:
Initial cash outflow= $360,000
Cash Inflow= $ 70,000
n= 7 years
Required return=13%
Note: At the beginning of 2nd year means end of 1st year
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