Explain the exact payback period

Assignment Help Finance Basics
Reference no: EM133205237

Project "Orbit" has the following cashflows for the next 5 years. Additionally, project Orbit requires $30,000 working capital (WC) for the initial investment year. However, due to various unforeseen circumstances, management believes that only 80% of the WC will be recovered in year 4. The similar projects have a cut off line of 3.5 years. 

Year

Net cash flow

 

0

(200,000)

 

1

50,000

 

2

65,000

 

3

85,000

 

4

5

75,000

30,000

 

 

50,000

Scrap value in year 5

While considering the working capital, the exact payback period is either (3.3, 3, 3.5, 3.625, 3.25, 3.55) years and orbit should either (accept or reject) the project.

Without considering the working capital, the exact payback period is either (3.3 3 3.5 3.625 3.25 3.55) years and orbit should either (accept or reject) the project. 

Reference no: EM133205237

Questions Cloud

Find current price of alpaca wool : You are an alpaca farmer and would like to hedge the risk you face due to alpaca wool price fluctuations. Unfortunately, there are no alpaca wool futures
Explain the book value capital structure : You are given the market values of CHAR's capital structure as follow: $52 million in total common equity, $20 million in debt, and $8 million in preferred stoc
Provide additional insights or contrasting perspectives : Accounting for Decision Making Discussion - Provide additional insights or contrasting perspectives about the cost center practices discussed by your peers
What is the required rate of return on the stock : Juggernaut Satellite Corporation earned $19.8 million for the fiscal year ending yesterday. The firm also paid out 20 percent of its earnings as dividends yeste
Explain the exact payback period : Project "Orbit" has the following cashflows for the next 5 years. Additionally, project Orbit requires $30,000 working capital (WC) for the initial investment y
Description of strategies to address motivation : Recommendation for creating a self-managing team including the rationale for creating the team. Outline of communication technology to be used for meetings
Discuss the role of the audit planning process : Audit Planning Process Discussion Board - Discuss the role of the audit planning process, including how auditors assess risk
Campaigns for products and services : Entry Finance has recently launched the following campaigns for their products and services:
Discuss presidency of jimmy carter : Discuss the presidency of Jimmy Carter.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd