The management of Unter Corporation, an architectural design firm, is considering an investment with the following ash flows: Year Investment Cash Inflow 1 $ 61,000 2 $5,000 3 4 5 6 7 8 9 10 $3,000 $6,000 $ 12,000 $ 13,000 $ 16,000 $ 10,000 $ 8,000 $10,000 $9,000 $9,000 Required: 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?

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
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The management of Unter Corporation, an architectural design firm, is considering an investment with the following
cash flows:
Year
L234567899
10
Investment Cash Inflow
$ 61,000
$5,000
$3,000
$6,000
$ 12,000
$ 13,000
$ 16,000
$ 10,000
$ 8,000
$ 10,000
$9,000
$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?
Transcribed Image Text:The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year L234567899 10 Investment Cash Inflow $ 61,000 $5,000 $3,000 $6,000 $ 12,000 $ 13,000 $ 16,000 $ 10,000 $ 8,000 $ 10,000 $9,000 $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?
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