Exercise 24-3 (Algo) Payback period and unequal cash flows LO P1 Beyer Company is considering buying an asset for $360,000. It is expected to produce the following net cash flows. Year 3 $70,000 Year Year 1 $80,000 Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Total Net cash flows 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.) Net Cash Flows $ (360,000) Year 2 $50,000 Payback period = Year 4 $250,000 Cumulative Cash Flows Year 5 $13,000
Exercise 24-3 (Algo) Payback period and unequal cash flows LO P1 Beyer Company is considering buying an asset for $360,000. It is expected to produce the following net cash flows. Year 3 $70,000 Year Year 1 $80,000 Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Total Net cash flows 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.) Net Cash Flows $ (360,000) Year 2 $50,000 Payback period = Year 4 $250,000 Cumulative Cash Flows Year 5 $13,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Exercise 24-3 (Algo) Payback period and unequal cash flows LO P1
Beyer Company is considering buying an asset for $360,000. It is expected to produce the following net cash flows.
Net cash flows
Year
Year 1
$80,000
Initial investment
Year 1
Year 2
Year 3
Year 4
Year 5
Total
Net Cash Flows
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.)
$ (360,000)
Payback period
Year 2
$50,000
=
Year 3
$70,000
Year 4
$250,000
Cumulative Cash
Flows
Year 5
$13,000
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