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?

Principles of Accounting Volume 2
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ISBN:9781947172609
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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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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
$100,000
545,000
200,000
3
365,000
4
480,000
5
505,000
6.
600,000
7
590,000
8.
295,000
9.
250,000
10
250,000
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 $100,000 545,000 200,000 3 365,000 4 480,000 5 505,000 6. 600,000 7 590,000 8. 295,000 9. 250,000 10 250,000 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.
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