Answered

At Westonci.ca, we connect you with the best answers from a community of experienced and knowledgeable individuals. Discover detailed solutions to your questions from a wide network of experts on our comprehensive Q&A platform. Experience the convenience of finding accurate answers to your questions from knowledgeable experts on our platform.

The Z Corporation is considering an investment with the following data (Ignore income taxes.): Year 1 Year 2 Year 3 Year 4 Year 5 Investment $ (32,000) $ (12,000) Cash inflow $ 8,000 $ 8,000 $ 20,000 $ 16,000 $ 16,000 Cash inflows occur evenly throughout the year. The payback period for this investment is: Multiple Choice 4.5 years 3.0 years 4.0 years 3.5 years

Sagot :

The payback period for this investment is 3.5 years.

In the payback, we analyze in how many years the invested amount is recovered. The computation is shown below:

In year 0 = $32,000

In year 0 = $12,000

In year 1 = $8,000

In year 2 = $8,000

In year 3 = $20,000

In year 4 = $16,000

In year 5 = $16,000

If we sum the first 3 year cash inflows than it would be $36,000

Now we deduct the $36,000 from the $44,000 , so the amount would be $8,000 as if we added the fourth year cash inflow so the total amount exceed to the initial investment. So, we deduct it And, the next year cash inflow is $16,000

So, the payback period equal to

= 3 years + $8,000 ÷ $16,000

= 3.5 years

Therefore , we can say that In 3.5 years, the invested amount is recovered.  

Learn more about Investment on:

brainly.com/question/25300925

#SPJ4

Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Keep exploring Westonci.ca for more insightful answers to your questions. We're here to help.