Beyer Company is considering the purchase of an asset for $240,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Year Net cash flows 0 1 2 3 4 6 5 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 place.) $ Cash Inflow (Outflow) Year 1 $60,000 (240,000) Year 2 $36,000 Cumulative Net Cash Inflow (Outflow) Year 3 $60,000 Year 4 $150,000 Year 5 $25,000 Total $331,000

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Chapter11: Capital Budgeting Decisions
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Beyer Company is considering the purchase of an asset for $240,000. It is expected to produce the following net cash flows. The cash
flows occur evenly within each year.
Net cash flows
Year
0
1
2
3
4
5
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 place.)
$
Cash Inflow
(Outflow)
(240,000)
Year 1
$60,000
Payback period =
Year 2
$36,000
Cumulative Net
Cash Inflow
(Outflow)
Year 3
$60,000
< Prev
Year 4
$150,000
1 of 11
Year 5
$25,000
www
www
Total
$331,000
Next >
Transcribed Image Text:Beyer Company is considering the purchase of an asset for $240,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Net cash flows Year 0 1 2 3 4 5 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 place.) $ Cash Inflow (Outflow) (240,000) Year 1 $60,000 Payback period = Year 2 $36,000 Cumulative Net Cash Inflow (Outflow) Year 3 $60,000 < Prev Year 4 $150,000 1 of 11 Year 5 $25,000 www www Total $331,000 Next >
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