The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year Investment Cash Inflow 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

Respuesta :

Answer:

The project will pya itself at the seventh year.

The last year cash inflwo will not impact the payback period as the project already achieve payback before that year.

Explanation:

The payback is the moment at which the project net clashflow is zero

that is the inflow matches the initial outflow:

[tex]\left[\begin{array}{ccccc}Year&Inflow&Outflow&Net&Acc\\1&1,000&15,000&-14,000&-14,000\\2&2,000&8,000&-6,000&-20,000\\3&2,500&&2,500&-17,500\\4&4,000&&4,000&-13,500\\5&5,000&&5,000&-8,500\\6&6,000&&6,000&-2,500\\7&5,000&&5,000&2,500\\8&4,000&&4,000&6,500\\9&3,000&&3,000&9,500\\10&2,000&&2,000&11,500\\\end{array}\right][/tex]

The payback period is termed as the period the company takes to reach the break-even point. The funds that are raised for the expansion of the company have to recoup with time and the period is known as the payback period.

The determination of the payback period of investment has been attached below.

The last year's payback does not affect the present payback as the accounting periods are different.

To know more about the  determination of the payback period of investment, refer to the link below:

https://brainly.com/question/23287507

Ver imagen swatiupadhyay714