leyer Company is considering buying an asset for $290,000. It is expected to produce the following net cash flows. Net cash flows Year Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Total Year 1 $70,000 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.) (290,000) Year 2 $40,000 Payback period= Year 3 $70,000 Cumulative Cash Flows Year 4 $200,000 Year 5 $20,000
leyer Company is considering buying an asset for $290,000. It is expected to produce the following net cash flows. Net cash flows Year Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Total Year 1 $70,000 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.) (290,000) Year 2 $40,000 Payback period= Year 3 $70,000 Cumulative Cash Flows Year 4 $200,000 Year 5 $20,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Beyer Company is considering buying an asset for $290,000. It is expected to produce the following net cash flows.
Year 4
Year 2.
$40,000
Year 3
$70,000
$200,000
Net cash flows
Year
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.)
Initial investment
Year 1
Year 2
Year 3
Year 4
Year 5
Total
Year 1
$70,000
Net Cash Flows
$
(290,000)
Payback period
Year 5
$20,000
Cumulative Cash
Flows
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