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What is the payback period of the following prject initial investment 50000 projected life 8 years net cash flows year1 5000?
Wiki User
∙ 10y ago
In this question only cash inflow for year 1 is provided but if the project life is 8 years then cash inflows and outflows of 8 years are required to find out the payback period of this project but if it is assumed that the cash inflow of year 1 of 5000 is continues for all 8 years then project will unable to even recover its cost as 5000 * 8 = 40000 so the project will bear a loss of 10000.
Wiki User
∙ 10y ago
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What is payback method on investment appraisal?
In payback period of investment appraisal method all cash inflows and outflows are analysed and find out that in how many years investment proposal will earn the invested money.
Compute the payback period for a project with the following cash flows if the companys discount rate is 12 percent Initial outlay equals 450 Cash flows Year 1 equals 325?
3.17 years
What is a payback period?
payback period , it is to pay your period on time jajajaja
How do you show small business investor payback on balance sheet?
Simply put: you don't show investor payback on a balance sheet. By definition, the balance sheet is a statement of financial position; a snapshot of the company's financial situation at a particular moment in time. Nor should you show the investor payback on the Cash Flow, P&L or Changes in Stockholder Equity Statements. We recommend showing the investor payback as a footnote to the P&L Statement, the Cash Flow Statement as well as a paragraph in the text of your document. In the paragraph, we recommend explaining 'how' you calculated the payback, what assumptions you used and over what period of time.
What is pay back period method of evaluating capital expenditure?
Payback period method evaluates any investing activity from how much money it will pay back and how much time it requires to payback in number of years.
How to compute discounted payback period?
What is the payback period of the following project? Initial Investment: $50,000 Projected life: 8 years Net cash flows each year: $10,000
What is the formula for the payback period?
Formula for the Payback Period. Payback period = Initial investment / Annual Cash inflows
Payback period concept is best explained by what?
Payback period is the time in which the initial cash outflow of an investment is expected to be recovered from the cash inflows generated by the investment. It is one of the simplest investment appraisal techniques.
How long will it take to achieve payback on the initial 2000000 TQM investment?
18 months
What is Pay back period method?
Method of evaluating investment opportunities and product development projects on the basis of the time taken to recoup the investment. This period is compared to the required payback period to determine the acceptability of the investment proposal. In contrast to return on investment and net present value methods, the cash inflows occurring after the payback period are not included in this method. Formula: Payback period (in years) = Initial capital investment ÷ Annual cash-flow from the investment.
How do you calculate payback period using bail-out method?
Initial Net Investment / (Annual expected cash flow + salvage value)
A method of evaluating capital investment proposals that ignore present value includes?
using payback period as the primary metric for decision making. The payback period measures the length of time it takes for the initial investment to be recovered from the project's cash flows. This method disregards the time value of money and does not account for the profitability or net present value of the investment.
How is discounted payback period computed?
Payback period = Net Investment Annual cash returns
What is payback method on investment appraisal?
In payback period of investment appraisal method all cash inflows and outflows are analysed and find out that in how many years investment proposal will earn the invested money.
What is payback period method?
Payback period method is the strategy used to calculate the amount of time that a given investment will take to recover the initial cost. The amount of time will help in deciding whether the project is viable or not. The shorter the period the more viable the project.
What is meant by the payback period?
Something is meant by the payback period. It is the length of time taken to recover the cost of an investment. This is what is meant by the payback period.
What is payback period in financial accounting?
1. Payback period is an evaluating tool of any business capital expenditure that how much time it requires to fully recover the initial investment in any project for example: if a project require 100 investment and returns as follows: Year 1 60 year 2 20 year 3 20 year 4 10 so payback period to recover 100 is 3 years.
