The management of Deitrich Inc., a civil engineering design company, is considering an investment in a high-quality

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The management of Deitrich Inc., a civil engineering design company, is considering an investment in a high-quality blueprint printer with the following cash flows:
Investment Cash Inflow Year 1........ $28,000 $ 4000 $2000 $3,000 $6,000 $8,000 $9,000 $8,000 $6000 $5000 $4,000 $4,000

Required:
1. Determine the payback period of the investment.
2. Would the payback period be affected if the cash inflow in the last year was several times as large?

Payback Period
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...
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Related Book For  book-img-for-question

Managerial Accounting

ISBN: 978-1259024900

9th canadian edition

Authors: Ray Garrison, Theresa Libby, Alan Webb

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