The management of Kawneer North America is considering investing in a new facility and the following cash flows are expected to result from the investment: Year Cash Outflow Cash Inflow 1 $1,900,000 $95,000 2 545,000 205,000 3 365,000 4 480,000 5 510,000 6 600,000 7 585,000 8 305,000 9 250,000 10 255,000 A. What is the payback period of this uneven cash flow? Round your answer to 2 decimal places. _____ years B.Does your answer change if year 10's cash inflow changes to $500,000? The answer for part A _____ if the cash inflow in year 10 changes to $500,00
The management of Kawneer North America is considering investing in a new facility and the following cash flows are expected to result from the investment: Year Cash Outflow Cash Inflow 1 $1,900,000 $95,000 2 545,000 205,000 3 365,000 4 480,000 5 510,000 6 600,000 7 585,000 8 305,000 9 250,000 10 255,000 A. What is the payback period of this uneven cash flow? Round your answer to 2 decimal places. _____ years B.Does your answer change if year 10's cash inflow changes to $500,000? The answer for part A _____ if the cash inflow in year 10 changes to $500,00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The management of Kawneer North America is considering investing in a new facility and the following
| Year | ||
| 1 | $1,900,000 | $95,000 |
| 2 | 545,000 | 205,000 |
| 3 | 365,000 | |
| 4 | 480,000 | |
| 5 | 510,000 | |
| 6 | 600,000 | |
| 7 | 585,000 | |
| 8 | 305,000 | |
| 9 | 250,000 | |
| 10 | 255,000 |
A. What is the payback period of this uneven cash flow? Round your answer to 2 decimal places.
_____ years
B.Does your answer change if year 10's cash inflow changes to $500,000?
The answer for part A _____ if the cash inflow in year 10 changes to $500,000.
Transcribed Image Text:The management of Kawneer North America is considering investing in a new facility and the following cash flows are expected to result from the investment:
Year Cash Outflow
Cash Inflow
1.
$1,900,000
$95,000
545,000
205,000
3
365,000
4
480,000
510,000
6
600,000
7
585,000
305,000
9
250,000
10
255,000
A. What is the payback period of this uneven cash flow? Round your answer to 2 decimal places.
years
B. Does your answer change if year 10's cash inflow changes to $500,000?
The answer for part A
v if the cash inflow in year 10 changes to $500,000.
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