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 $1,905,000 $105,000 555,000 200,000 360,000 475,000 515,000 605,000 595,000 305,000 250,000 250,000 A. What is the payback period of this uneven cash flow? Round your answer to 2 decimal places. 1 2 3 4 5 6 7 8 9 10 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.
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 $1,905,000 $105,000 555,000 200,000 360,000 475,000 515,000 605,000 595,000 305,000 250,000 250,000 A. What is the payback period of this uneven cash flow? Round your answer to 2 decimal places. 1 2 3 4 5 6 7 8 9 10 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.
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 6EA: The management of Kawneer North America is considering investing in a new facility and the following...
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Question
![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
$1,905,000
$105,000
555,000
200,000
360,000
475,000
515,000
605,000
595,000
305,000
250,000
250,000
A. What is the payback period of this uneven cash flow? Round your answer to 2 decimal places.
1
2
3
4
5
6
7
8
9
10
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff74bd610-8b6d-4274-a023-2a66068be140%2F8ab1e22a-6878-448d-b32a-483d7a9b3596%2Fx0ikgjg_processed.png&w=3840&q=75)
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
$1,905,000
$105,000
555,000
200,000
360,000
475,000
515,000
605,000
595,000
305,000
250,000
250,000
A. What is the payback period of this uneven cash flow? Round your answer to 2 decimal places.
1
2
3
4
5
6
7
8
9
10
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.
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