Tallahassee Company is considering an investment in a high quality blueprint printer with the following cash flows:
|
Year |
Investment |
Cash Inflow |
|
1 |
($38,000) |
$2,000 |
|
2 |
(6,000) |
4,000 |
|
3 |
8,000 |
|
|
4 |
9,000 |
|
|
5 |
12,000 |
|
|
6 |
10,000 |
|
|
7 |
8,000 |
|
|
8 |
6,000 |
|
|
9 |
5,000 |
Required:
a) Determine the payback period of the investment.
b) Would the payback period be affected if the cash inflow in year 8 was $18,000?