Question

Assume a $72,000 investment and the following cash flows for two alternatives.

year.
investment a.
investment b

1.
$25,000.
$22,000

2.
25,000.
15,000

3.
15,000.
50,000

4.
10,000.
--------

5.
30,000.
---------

calculate the payback for investment A and B

Answer #1

X:

Year | Cash flows | Cumulative Cash flows |

0 | (72000) | (72000) |

1 | 25000 | (47000) |

2 | 25000 | (22000) |

3 | 15000 | (7000) |

4 | 10000 | 3000 |

5 | 30000 | 33000 |

Payback period=Last period with a negative cumulative cash flow+(Absolute value of cumulative cash flows at that period/Cash flow after that period).

=3+(7000/10000)=**3.7 years**

Y:

Year | Cash flows | Cumulative Cash flows |

0 | (72000) | (72000) |

1 | 22000 | (50000) |

2 | 15000 | (35000) |

3 | 50000 | 15000 |

Payback period=Last period with a negative cumulative cash flow+(Absolute value of cumulative cash flows at that period/Cash flow after that period).

=2+(35000/50000)=**2.7 years.**

Assume a $100,000 investment and the following cash flows for
two alternatives. Year Investment A Investment B 1 $ 30,000 $
45,000 2 35,000 30,000 3 25,000 50,000 4 20,000 — 5 15,000 — a.
Calculate the payback for investment A and B. (Round your answers
to 2 decimal places.)

assume a $42,000 investment and the following cash
flows for two alternatives.
year. investment
x. investment y
1.
$15,000.
$22,000
2.
14,000.
15,000
3.
10,000.
10,000
4.
15,000.
----
5.
20,000.
------
calculate the payback for investment x and y.

Assume a $105,000 investment and the following cash flows for
two alternatives.
Year
Investment A
Investment B
1
$
45,000
$
55,000
2
30,000
30,000
3
15,000
25,000
4
30,000
—
5
10,000
—
a. Calculate the payback for investment A and B.
(Round your answers to 2 decimal places.)
b. Which investment would you select under the
payback method?
Investment A
Investment B
c. If the inflow in the fifth year for Investment
A was $10,000,000 instead...

Assume a $45,000 investment and the following cash flows for two
alternatives:
Year
Investment A
Investment B
1
$10,000
$10,000
2
15,000
15,000
3
15,000
30,000
4
15,000
—
5
3,900,000
—
Calculate the payback for investment A and B. (Round the
final answers to 2 decimal places.)
Payback period
Investment A
years
Investment B
years
Which of the alternatives would you select under the payback
method?
Investment A
Investment B

Assume a $55,000 investment and the following cash flows for two
alternatives.
Year
Investment X
Investment Y
1
$15,000
$25,000
2
25,000
25,000
3
10,000
15,000
4
20,000
—
5
20,000
—
a. Calculate the payback for investment X and Y.
(Do not round intermediate calculations. Round your answers
to 2 decimal places.)
investment X ________ years
investment Y ________ years

Assume a $90,000 investment and the following cash flows for two
alternatives.
Year
Investment A
Investment B
1
$
30,000
$
30,000
2
25,000
30,000
3
20,000
40,000
4
30,000
—
5
25,000
—
a. Calculate the payback for investment A and B.
(Round your answers to 2 decimal places.)
Investment A_________years
investment B___________years
b. Which investment would you select under the
payback method?
Investment A
Investment B
c. If the inflow in the fifth year for Investment
A...

Assume a $70,000 investment and the following cash flows for two
alternatives.
Year
Investment A
Investment B
1
$
20,000
$
35,000
2
25,000
25,000
3
20,000
20,000
4
20,000
—
5
25,000
—
a. Calculate the payback for investment A and
B.

Assume a $90,000 investment and the following cash flows for two
alternatives: Year Investment A Investment B 1 $25,000 $40,000 2
30,000 40,000 3 25,000 28,000 4 19,000 __Calculate the payback for
Investments A and B. If the inflow in the fifth year for Investment
A was $25,000,000 instead of $25,000, would your answer change
under the payback method?

Assume a $85,000 investment and the following cash flows for two
alternatives.
Year
Investment A
Investment B
1
$
25,000
$
35,000
2
25,000
35,000
3
25,000
20,000
4
20,000
—
5
20,000
—
a. Calculate the payback for investment A and B.
(Round your answers to 2 decimal places.)
b. Which investment would you select under the
payback method?
Investment A
Investment B
c. If the inflow in the fifth year for Investment
A was $20,000,000 instead...

King Co. invests $105,000 and the following cash flows for two
investments:
Year
Investment A
Investment B
1
$30,000
$40,000
2
25,000
30,000
3
20,000
35,000
4
30,000
—
5
4,300,000
—
Calculate the payback period for investment A and B (in yrs)

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 5 minutes ago

asked 13 minutes ago

asked 16 minutes ago

asked 22 minutes ago

asked 26 minutes ago

asked 29 minutes ago

asked 31 minutes ago

asked 38 minutes ago

asked 53 minutes ago

asked 54 minutes ago

asked 54 minutes ago

asked 54 minutes ago