60.1K

Verified Solution

Link Copied!

Return to question Beyer Company is considering the purchase of an asset for $230,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Year 1 $53,000 Year 2 $35,000 Net cash flows Year 3 $64,000 Year 4 $150,000 Year 5 $26,000 Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback period answer to 2 decimal place.) Answer is complete but not entirely correct. Year Cash Inflow (Outflow) 0 Cumulative Net Cash Inflow (Outflow) $ 230,000 177,000 142,000 78,000 % 72,000 1 $ (230,000) 53,000 35,000 64,000 150,000 26.000 2 3 4 5 46.000 w 1 Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal place.) Answer is complete but not entirely correct. Year Cash Inflow (Outflow) 0 Cumulative Net Cash Inflow (Outflow) $ 230,000 177,000 142,000 78,000 1 2 3 $ (230,000) 53,000 35,000 64,000 150,000 26,000 $ 98,000 4 72,000 5 46,000 Payback period = 3.52 years w 1 leck my work ! Required information [The following information applies to the questions displayed below.) Project A requires a $335,000 initial investment for new machinery with a five-year life and a salvage value of $46,000. The company uses straight-line depreciation. Project A is expected to yield annual net income of $25,100 per year for the next five years. Compute Project A's payback period. 1 Payback Period Choose Denominator: Annual net cash flow Choose Numerator: Cost of investment 1 + Payback Period Payback period 0 11 11

Answer & Explanation Solved by verified expert

See Answer