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STatiana [176]
3 years ago
14

A firm is evaluating a capital budgeting project that generates cash inflows equal to $50 per year for the next five years. If t

he project's traditional payback period (PB) is 3.6 years, what is its initial cost? a. $180 b. $200 c. $140 d. $120 e. $150
Business
1 answer:
Anna11 [10]3 years ago
3 0

Answer:

Initial Cost = $180

Explanation:

Payback period estimates the time an investment projects resulting cash flows take to recover the initial amount o=invested in the project. A traditional payback period doesnot take present value into account and just focuses on the nominal recovery of the initial investment.

If a capital budgeting project provides inflows of $50 per year and the payback period is 3.6 years, the initial investment is:

3.6 = 50 + 50 + 50 + x

Where x = 0.6 of 50

and x = 0.6 * 50 = 30

Initial cost = 50 + 50 + 50 + 30 = $180

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3 0
3 years ago
Andy Company had a cash balance on May 1 of $ 29 000. At the end of May, the cash balance has increased to $ 30 000. During the
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Answer:

$49,000

Explanation:

The cash balance at the end of the period is the remaining balance after considering the opening cash balance and the net movement (which is the inflow and outflow) in cash during the period.

Let the cash payments be y

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y = $29000 + $50000 - $30,000

y = $49,000

Cash payments for the month of May were $49,000

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3 years ago
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Answer:

See the attached table for answer.

Explanation:

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True or false created during the great depression, the federal deposit insurance program resulted in a large number of bank fail
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False. This is not a true thing.
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