Question

Given the following cash flows and if MARR=20%? Year Cash Flow 0 -$10700 1 -$1200 2 $2200 3 $3800 4 $5200 5 $7600 6-10 $10100 What is the Simple Payback Period? Ans. x.x What is the Discounted Payback Period? Ans. x.x

          Given the following cash flows and if MARR=20%?
Year
Cash Flow
0
-$10700
1
-$1200
2
$2200
3
$3800
4
$5200
5
$7600
6-10
$10100
What is the Simple Payback Period?
Ans. x.x
What is the Discounted Payback Period?
Ans. x.x

Added by Fernando P.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Brooke Bussoletti

Step 1

In this case, the initial investment is -$10,700. So, we start by subtracting the cash flows from the initial investment until the cumulative cash flows become positive. Year 0: -$10,700 Year 1: -$10,700 - (-$1,200) = -$9,500 Year 2: -$9,500 + $2,200 = Show more…

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Given the following cash flows and if MARR = 20%: Year 0 1 2 3 4 5 6-10 Cash Flow -$10,700 -$1,200 $2,200 $3,800 $5,200 $7,600 $10,100 What is the Simple Payback Period? Ans. X.X What is the Discounted Payback Period?