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kolbaska11 [484]
3 years ago
10

You are considering an investment in a startup that will cost $100,000 but you will receive a cash inflow of $25,000 every year

for 5 years from the sale of products the startup will manufacture. The required return is 9%, and payback cutoff is 5 years. a) What is the payback period
Business
1 answer:
bulgar [2K]3 years ago
8 0

Answer:

Simple payback is 4 years

Total discounted Payback is more than the 5 years which is the payback cutoff period.

Explanation:

Payback period is the time period in which the project recovers the initial cost incurred. Lower the payback period the more beneficial will be the project.

Simple payback = $100,000 / $25,000 = 4 years

Discounted Payback

Discounted payback is calculated by using the present value of future cash flows.

Total discounted cash flows = 22935.78 + 21042.0 + 19304.59 + 17710.63 + 16248.28 = 97,241.28

As sum of all cash flows are less than the initial investment so, total discounted Payback is more than the 5 years which is the payback cutoff period.

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Answer:

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Explanation:

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Option A is the correct answer.

<h3>What is a federal reserve?</h3>

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When the federal reserves increase the money supply then the money supply curve moves in the right direction and when the federal reserve decreases the money supply then the money supply moves toward the left. This shows a direct relationship between the federal reserve and the money supply curve.

Therefore, there is a rise in money supply by the Federal reserve causing the money supply curve to shift in the right direction.

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You meet a friend of yours for lunch. He is a supplier of coffee machines. While talking business, you mention to him that you'v
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More about dividends:

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