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skylarjane1030
21.04.2020 •
Business
Wayne Company is considering a long-term investment project called ZIP. ZIP will require an investment of $142,104. It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $80,000, and annual cash outflows would increase by $41,800. Compute the cash payback period.
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Ответ:
3.72 years
Explanation:
The cash payback period of this investment is the initial investment of $142,104 divided by net increase in cash in cash flow per period.
Cash Payback Period =Initial Investment /Net increase Cash Flow per Period
Net increase in cash flow per period=$80,000-$41,800=$38,200
Cash payback period=$142,104/$38,200=3.72 years
It would take 3 years 9 months(0.72*12 months) for the project to pay back its initial investment of $142,104
Ответ: