Purchase Solution

Calculate the payback period for a set of cash flows

Not what you're looking for?

Ask Custom Question

What is the payback period for the following set of cash flows?

Year 0 Cash Flow is -$2,500;
year 1 cash flow is $300;
year 2 cash flow is $1500;
year 3 cash flow is $900;
year 4 cash flow is $300

Purchase this Solution
Solution Summary

The solution shows the outflows and inflows for each year, and then explains the length of the payback period.

Solution Preview

In year 0 the outflow is = $2,500
In year 1 the inflow is = $300, balance ...

Purchase this Solution
Free BrainMass Quizzes
Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

View More Free Quizzes
Related BrainMass Solutions

  • Payback period, Net Present Value, IRR, MIRR

    Please see the attached file. The solution calculates payback period, payback period, net present value, internal rate of return, and MIRR for a set of cash flows.

  • Payback period and NPV

    196333 Calculate payback period and NPV of 3 projects The cash flow for projects A, B, C are given below: Year ProjectA ProjectB ProjectC 0 -1000 -1000 -1000 1 0 1000 0 2 2000 0 0 3 -1000 1000 3000 (a) Calculate the payback period and net present

  • Comparison of Capital Budgeting Techniques: The Dilemma at Day-Pro

    See the attached file for complete help: Problems with Payback Period It ignores time value of money it ignores cash flows after payback period In case of synthethic resin bulk of cash flows are received after the pay back period.

  • project cash flows, interest, payback period, capital invest

    b- it recognizes cash flows which occur after the payback period. c- it is a measure of risk exposure. d-it is easy to calculate.

  • Incremental cash flows

    Calculate the payback period (P/B) and the net present value (NPV) for the project. Assume the company has a P/B (payback) policy of not accepting projects with life of over 3 years.

  • Project NPV

    Using the cash flows and the payback period we can calculate the initial investment.

  • NPV

    a. $577.68 b. $765.91 c. $1,049.80 d. $2,761.32 e. $3,765.91 NPV = PV of cash flows - initial investment Using payback period we can calculate the initial investment Payback period is the time taken to recover the initial investment.

  • Capital Budgeting - Payback, NPV, PI, IRR

    The discount rate = 12% We calculate or read from the tables the value of PVIF (Present Value Interest Factor ) for 12% and calculate the Discounted cash flows.

  • Capital Budgeting : Discounted Payback Period

    438786 Calculate the discounted payback period An investment project costs $17,300 and has annual cash flows of $3,900 for 6 years. If the discount rate is zero percent, the discounted payback period is ________years.

View More Related Solutions