Exercise 24-1 Payback period computation; uneven cash flows LO P1
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Beyer
Company is considering the purchase of an asset for $180,000. It is
expected to produce the following net cash flows. The cash flows occur
evenly throughout each year.
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| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Total | |||||||||||||||||||
| Net cash flows | $ | 60,000 | $ | 40,000 | $ | 70,000 | $ | 125,000 | $ | 35,000 | $ | 330,000 | ||||||||||||
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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 places.)
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