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The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year 1 2 3 4 5 6 7 8 9 10 Investment Cash Inflow $ 2,000 $4,000 $ 10,000 $ 11,000 $ 14,000 $ 12,000 $ 10,000 $ 13,000 $ 12,000 $ 12,000 $ 52,000 $ 9,000 Required: 1. Determine the payback period of the investment. 2. Would the payback period be affected if the cash inflow in the last year were several times as large?

The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year 1 2 3 4 5 6 7 8 9 10 Investment Cash Inflow $ 2,000 $4,000 $ 10,000 $ 11,000 $ 14,000 $ 12,000 $ 10,000 $ 13,000 $ 12,000 $ 12,000 $ 52,000 $ 9,000 Required: 1. Determine the payback period of the investment. 2. Would the payback period be affected if the cash inflow in the last year were several times as large?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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56 The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year 1 2 3 568L9SA 10 Investment Cash Inflow $ 2,000 $ 4,000 $ 52,000 $9,000 $ 10,000 $ 11,000 $ 14,000 $ 12,000 $ 10,000 $ 13,000 $ 12,000 $ 12,000 Required: 1. Determine the payback period of the investment. 2. Would the payback period be affected if the cash inflow in the last year were several times as large? Required 1 Required 2 Complete this question by entering your answers in the tabs below. Determine the payback period of the investment. Note: Round your answer to 1 decimal place. Payback period years Required 1 Required 2
Transcribed Image Text:56 The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year 1 2 3 568L9SA 10 Investment Cash Inflow $ 2,000 $ 4,000 $ 52,000 $9,000 $ 10,000 $ 11,000 $ 14,000 $ 12,000 $ 10,000 $ 13,000 $ 12,000 $ 12,000 Required: 1. Determine the payback period of the investment. 2. Would the payback period be affected if the cash inflow in the last year were several times as large? Required 1 Required 2 Complete this question by entering your answers in the tabs below. Determine the payback period of the investment. Note: Round your answer to 1 decimal place. Payback period years Required 1 Required 2
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