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Payback period. What are the payback periods of projects E and F in the following table: E ? 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.) With a 3-year cutoff period for recapturing the initial cash outflow, project E would be (Select from the drop-down menu.) What is the payback period for project F? Oyears (Round to one decimal place.) With a 3-year cutoff period for recapturing the initial cash outflow, project F would be (Select from the drop-down menu.) Data Table (Click on the following icon e in order to copy its contents into a spreadsheet.) Cash Flow Cost $46,000 $95,000 $10,222 $28,500 Cash flow year 1 Cash flow year 2 $10,222 $38,000 Cash flow year 3 $10,222 $9,500 Cash flow year 4 $10,222 $19,000 Enter your answer in each of the an Cash flow year 5 Cash flow year 6 $10,222 $0 $10,222 $0

Payback period. What are the payback periods of projects E and F in the following table: E ? 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.) With a 3-year cutoff period for recapturing the initial cash outflow, project E would be (Select from the drop-down menu.) What is the payback period for project F? Oyears (Round to one decimal place.) With a 3-year cutoff period for recapturing the initial cash outflow, project F would be (Select from the drop-down menu.) Data Table (Click on the following icon e in order to copy its contents into a spreadsheet.) Cash Flow Cost $46,000 $95,000 $10,222 $28,500 Cash flow year 1 Cash flow year 2 $10,222 $38,000 Cash flow year 3 $10,222 $9,500 Cash flow year 4 $10,222 $19,000 Enter your answer in each of the an Cash flow year 5 Cash flow year 6 $10,222 $0 $10,222 $0

Essentials Of Investments
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
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**Payback Period Calculation** In the following exercise, we are examining the payback periods for projects E and F. Assume all cash flow is evenly spread throughout the year. If the cutoff period is 3 years, which project(s) should you accept? ### Questions: 1. **What is the payback period for project E?** - Enter your answer in years and round to one decimal place. 2. **With a 3-year cutoff period for recapturing the initial cash outflow, project E would be:** - (Select from the drop-down menu) 3. **What is the payback period for project F?** - Enter your answer in years and round to one decimal place. 4. **With a 3-year cutoff period for recapturing the initial cash outflow, project F would be:** - (Select from the drop-down menu) ### Data Table: The table below displays the cost and cash flows for projects E and F over six years. | Cash Flow | Project E | Project F | |-----------------|-----------|-----------| | Cost | $46,000 | $95,000 | | Cash flow year 1| $10,222 | $28,500 | | Cash flow year 2| $10,222 | $38,000 | | Cash flow year 3| $10,222 | $9,500 | | Cash flow year 4| $10,222 | $19,000 | | Cash flow year 5| $10,222 | $0 | | Cash flow year 6| $0 | $0 | Each project requires an initial investment, indicated under "Cost," followed by projected cash inflows for the following years. Use these figures to determine how long it takes for each project to recoup its initial cost investment—that is, to calculate the payback period. Then, determine if the projects meet the 3-year cutoff criterion for acceptance.
Transcribed Image Text:**Payback Period Calculation** In the following exercise, we are examining the payback periods for projects E and F. Assume all cash flow is evenly spread throughout the year. If the cutoff period is 3 years, which project(s) should you accept? ### Questions: 1. **What is the payback period for project E?** - Enter your answer in years and round to one decimal place. 2. **With a 3-year cutoff period for recapturing the initial cash outflow, project E would be:** - (Select from the drop-down menu) 3. **What is the payback period for project F?** - Enter your answer in years and round to one decimal place. 4. **With a 3-year cutoff period for recapturing the initial cash outflow, project F would be:** - (Select from the drop-down menu) ### Data Table: The table below displays the cost and cash flows for projects E and F over six years. | Cash Flow | Project E | Project F | |-----------------|-----------|-----------| | Cost | $46,000 | $95,000 | | Cash flow year 1| $10,222 | $28,500 | | Cash flow year 2| $10,222 | $38,000 | | Cash flow year 3| $10,222 | $9,500 | | Cash flow year 4| $10,222 | $19,000 | | Cash flow year 5| $10,222 | $0 | | Cash flow year 6| $0 | $0 | Each project requires an initial investment, indicated under "Cost," followed by projected cash inflows for the following years. Use these figures to determine how long it takes for each project to recoup its initial cost investment—that is, to calculate the payback period. Then, determine if the projects meet the 3-year cutoff criterion for acceptance.
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