The management of Unter Corporation, an architectural design firm, is considering an investment with thefollowing cash flows:Year Investment Cash Inflow1 ......................... $15,000 $1,0002 ......................... $8,000 $2,0003 ......................... $2,5004 ......................... $4,0005 ......................... $5,0006 ......................... $6,0007 ......................... $5,0008 ......................... $4,0009 ......................... $3,00010 ......................... $2,000Required: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 timesas large?
The management of Unter Corporation, an architectural design firm, is considering an investment with the
following cash flows:
Year Investment
1 ......................... $15,000 $1,000
2 ......................... $8,000 $2,000
3 ......................... $2,500
4 ......................... $4,000
5 ......................... $5,000
6 ......................... $6,000
7 ......................... $5,000
8 ......................... $4,000
9 ......................... $3,000
10 ......................... $2,000
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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