The graphic-design team meets weekly with the executive director of marketing, Mr. Kitano. Identify the adjectives in the preced
1 answer:
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Answer:
During the 3rd year:
It will be in the 5th month of the Third year
Explanation:
We have to discount each year cash flow at present day using the firm's cost of capital of 11%
Adding the discounted cash flow we got that the firm will achieve the payback during the third year.
Now <u>in the attempt of being more precise:</u>
At the end of the 2nd year, we are 133.40 away from payback
By the end of the third year, the company receive 325.38
So in 12 months, we generate 325.38
In how many months do we manage to generate 133.40 and payback the investment?
133.40*12/325.38 = 4.91
So in the 5th month of the Third year, the firm will achieve the payback.