Estimate the payback period for investor in the firm based on the chart Year 0 1 2
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Question:
Estimate the payback period for investor in the firm based on the chart
| Year | 0 | 1 | 2 | 3 | 4 |
| Investment | $ 15,000.0 | ||||
| WC Investment | $ 1,000.0 | ||||
| Salvage | $7,000 | ||||
| Revenues | $10,000 | $11,000 | $12,000 | $13,000 | |
| #NAME? | $ 4,000 | $4,400 | $4,800 | $5,200 | |
| #NAME? | $4,000 | $3,000 | $2,000 | $1,000 | |
| EBIT | $2,000 | $3,600 | $5,200 | $6,800 | |
| EBIT (1-t) | $1,200 | $2,160 | $3,120 | $4,080 | |
| #NAME? | $4,000 | $3,000 | $2,000 | $1,000 | |
| #NAME? | $100 | $100 | $100 | ($1,300) | |
| FCFF | $ 16,000.0 | $5,100 | $3,060 | $5,020 | $13,380 |
Expert Answer:
To estimate the payback period we need to calculate the cumulative cash flows until the ini... View the full answer
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