Giggins Limited is planning to expand its business. The expansion will cost £350,000 initially to purchase new premises and a further £150,000 to purchase equipment. Net cash inflows from the next seven years ofthe project are as follows:Year Net cash inflows1 60,0002 80,0003 130,0004 150,0005 175,0006 250,0007 275,000In which year would Giggins' investment be fully recovered?

Giggins Limited is planning to expand its business. The expansion will cost £350,000 initially to purchase new premises and a further £150,000 to purchase equipment. Net cash inflows from the next seven years ofthe project are as follows:Year Net cash inflows1 60,0002 80,0003 130,0004 150,0005 175,0006 250,0007 275,000In which year would Giggins' investment be fully recovered?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 22E

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