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Determine the payback period of the investment

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Reference no: EM132861985

Problem - The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows:

Year

Investment

Cash Inflow

1

$65,000

$5,000

2

$5,000

$10,000

3

$20,000

 

4

$22,000

 

5

$25,000

 

6

$23,000

 

7

$21,000

 

8

$19,000

 

9

$18,000

 

10

$18,000

 

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?

Reference no: EM132861985

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