Questions: 1) A firm considers an investment whose cost is $ 3 000 000 which...
50.1K
Verified Solution
Link Copied!
Question
Finance
Questions: 1) A firm considers an investment whose cost is $ 3 000 000 which is paid in 2022. The expected cash flows from this investment are as follows: 2023 $ 500 000 2024 $ 700 000 2025 $ 1 000 000 2026 $ 1 000 000 2027 $ 800 000 2028 $ 600 000 The firm's desired target payback period is 3 years which means that firm accepts all projects with a payback period less than 3 years. a) Find the exact payback period of this investment on the basis of simple payback period. b) Should the firm accept or reject this investment (give your answer simply as accept or reject) Note: Notice that I want to see the exact payback period which means you need to use interpolation. See my written notes to understand how the interpolation is done
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
