The table titled "Cash Flow" presents a comparison between two projects, E and F, over a six-year period.- **Cost**: - Project E: $44,000 - Project F: $90,000- **Annual Cash Flow**: - **Year 1**: - Project E: $9,778 - Project F: $36,000 - **Year 2**: - Project E: $9,778 - Project F: $27,000 - **Year 3**: - Project E: $9,778 - Project F: $18,000 - **Year 4**: - Project E: $9,778 - Project F: $9,000 - **Year 5**: - Project E: $9,778 - Project F: $0 - **Year 6**: - Project E: $9,778 - Project F: $0This table allows for a comparative analysis of the initial costs and the annual cash flows associated with both projects over a six-year timespan. **Payback Period***What are the payback periods of projects E and F in the following table? Assume all the cash flow is evenly spread throughout the year. If the cutoff period is 3 years, which project(s) do you accept?*---**What is the payback period for project E?**____ years (Round to one decimal place.)

Answered: Image /qna-images/answer/c50594c3-d19c-4cad-be65-5ec7ec2e115c.jpg

Cash Flow E $44,000 $9,778 $9,778 Cost $90,000 Cash flow year 1 $36,000 Cash flow year 2 Cash flow year 3 Cash flow year 4 Cash flow year 5 $27,000 $9,778 $18,000 $9,778 $9,000 $0 $9,778 Cash flow year 6 $9,778 $0

Cash Flow E $44,000 $9,778 $9,778 Cost $90,000 Cash flow year 1 $36,000 Cash flow year 2 Cash flow year 3 Cash flow year 4 Cash flow year 5 $27,000 $9,778 $18,000 $9,778 $9,000 $0 $9,778 Cash flow year 6 $9,778 $0

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

Cash Book

So, before coming to the topic of cash books, I will let you briefly explain about the cash so that you all can be familiar with the word cash. Cash comes under the category of the current asset which is used as a medium of exchange for all the financial transactions in the firm. Cash is something that is universally accepted as a mode of payment. So, now comes to the topic i.e., cash book.

Question

The table titled "Cash Flow" presents a comparison between two projects, E and F, over a six-year period.

- **Cost**:
- Project E: $44,000
- Project F: $90,000

- **Annual Cash Flow**:
- **Year 1**:
- Project E: $9,778
- Project F: $36,000
- **Year 2**:
- Project E: $9,778
- Project F: $27,000
- **Year 3**:
- Project E: $9,778
- Project F: $18,000
- **Year 4**:
- Project E: $9,778
- Project F: $9,000
- **Year 5**:
- Project E: $9,778
- Project F: $0
- **Year 6**:
- Project E: $9,778
- Project F: $0

This table allows for a comparative analysis of the initial costs and the annual cash flows associated with both projects over a six-year timespan.

**Payback Period**

*What are the payback periods of projects E and F in the following table? Assume all the cash flow is evenly spread throughout the year. If the cutoff period is 3 years, which project(s) do you accept?*

---

**What is the payback period for project E?**

____ years (Round to one decimal place.)

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