Answer:
$233 million
Explanation:
Statement of cash flow
Cash flow from operating activity
Particulars Amount ($ in millions)
Net income 113
<em>Adjustment in net income</em>
Depreciation 72
Amortization 5
Loss on sale of land 3
Decrease account receivable 14
Decrease inventory 12
Increase account payable 8
Decrease salary payable (8)
Increase interest payable 7
Increase income tax payable 7 <u>120</u>
Net cash flow from operating activity <u>233</u>
Answer:
1. Payback period = 2.8 years
2. Break-even time = 3.8 years
3. NPV = $12,577
Explanation:
NOTE: See the attached excel file for the calculation tables.
1. Determine the payback period for this investment.
Payback period = 2 years and [(49,600 / 70,800) * 12] months = 2 years and 8 months approximately = 2.8 years.
2. Determine the break-even time for this investment.
Break-even time = 3 years and [(23,622 / 36,199) * 12] months = 3 years and 8 months approximately = 3.8 years
3. Determine the net present value for this investment.
Net present value (NPV) of this investment is $12,577
If Jayda started the corporation, her position is founder and CEO of the business.
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