Beyer Company is considering buying an asset for $350,000. It is expected to produce the following net cash flows. Year 1 Year 2 $82,000 $45,000 Net cash flows Year Initial investment Year 1 Rad mit Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal places) Year 2 Year 3 Year 4 Year 5 Total S Net Cash Flows (350,000) 82.000 45.000 70,000 100,000 14.000 41.000 Year 3 $70,000 Cumulative Cash Flows Payback period. ne response was expected cal formula besed calcu S (391,000) 82.000 127.000 C 197,000 377.000 391,000 00 Year 4 $180,000 6.93 years Year 5 $14,000 rre: he pots deducted

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Chapter1: Financial Statements And Business Decisions
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Exercise 24-3 (Algo) Payback period and unequal cash flows LO P1
Beyer Company is considering buying an asset for $350,000. It is expected to produce the following net cash flows.
Year 3
Year 4
$70,000
$180,000
Net cash flows
Year
Initial investment
Year 1
Year 2
Year 3
Year 4
Year 1
$82,000
Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your
Payback Period answer to 2 decimal places.)
Year 5
Total
$
S
Net Cash
Flows
dicates no response was expected
Year 2
$45,000
(350,000) S
82.000
Payback period
45.000
70,000
180,000
14.000
41,000
Cumulative
Cash Flows
(391.000)
82.000
127.000
197.000
377.000
391.000
6.93-
based calculation a
Year 5
$14,000
years
ret: he ports deducted
Transcribed Image Text:Exercise 24-3 (Algo) Payback period and unequal cash flows LO P1 Beyer Company is considering buying an asset for $350,000. It is expected to produce the following net cash flows. Year 3 Year 4 $70,000 $180,000 Net cash flows Year Initial investment Year 1 Year 2 Year 3 Year 4 Year 1 $82,000 Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal places.) Year 5 Total $ S Net Cash Flows dicates no response was expected Year 2 $45,000 (350,000) S 82.000 Payback period 45.000 70,000 180,000 14.000 41,000 Cumulative Cash Flows (391.000) 82.000 127.000 197.000 377.000 391.000 6.93- based calculation a Year 5 $14,000 years ret: he ports deducted
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