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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 | ||
1 | $1,900,000 | $100,000 |
2 | 550,000 | 200,000 |
3 | 360,000 | |
4 | 480,000 | |
5 | 510,000 | |
6 | 600,000 | |
7 | 590,000 | |
8 | 300,000 | |
9 | 250,000 | |
10 | 250,000 |
a. what is the payback period of this uneven cash flow?
b. does your answer change if year 10's cash inflow changes to $500,000?
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