Question
In: Accounting
Ignore income taxes in this problem.) The Zinger Corporation is considering an investment that has the...
Ignore income taxes in this problem.) The Zinger
Corporation is considering an investment that has the following
data:
Year 1Year 2Year 3Year 4Year 5
Investment$13,500$4,100Cash
inflow$3,100$3,100$8,000$5,100$5,100
Cash inflows occur evenly throughout the year. The payback period for this investment is: (Round your answer
3 years
4 years
3.7 years
4.7 years
Solutions
Expert Solution
| Answer | |||
| The correct option is C : 3.7 years | |||
| Explanation | |||
| Year | Cash outflow | Cash inflow | Cum. cash inflow |
| 1 | $ -13,500 | $ 3,100 | $ -10,400 |
| 2 | $ -4,100 | $ 3,100 | $ -11,400 |
| 3 | $ 8,000 | $ -3,400 | |
| 4 | $ 5,100 | $ 1,700 | |
| 5 | $ 5,100 | $ 6,800 | |
| payback period 3 +$3400/$5100 | |||
| payback period = 3.7 | |||
ekkarill92 answered 2 years agoRelated Solutions
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Required rate of return
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