Question

williams excavating is examining a new warehouse operations.that will cost 162500. the warehouse is forcast to generate positive caa flows over the nexr four years in the amount of 625000 in years one and two and 500000 in three years ans 280000 in year four. rate return is 11%. what is the pay back period of this project

Answer 1

D11 fx =2+375000/500000 ДА в Assuming Initial cash flow is 1625000 2 year Cash flows Cumulative Cash flows 0 $ (16,25,000.00) $ (16,25,000.00) 11 $ 6,25,000.00 $ (10,00,000.00) 5 2 $ 6,25,000.00 $ (3,75,000.00) 3 $ 5,00,000.00 $ 1,25,000.00 7 4 $ 2,80,000.00 $ 4,05,000.00 Payback Period 2+375000/500000 11 2.75. Years 12 13 Assuming Initial cash flow is 162500 14 year Cash flows Cumulative cash flows 15 0 $ (1,62,500.00) $ (1,62,500.00) 1 $ 6,25,000.00 $ 4,62,500.00 - 2 $ 6,25,000.00 $ 10,87,500.00 3 $ 5,00,000.00 $ 15,87,500.00 - 4 $ 2,80,000.00 $ 18,67,500.00 Payback Period 0+162500/625000 0.26 Years

011 fx =2+375000/500000 1 2 year 30 4 1 Assuming Initial cash flow is 1625000 Cash flows -1625000 625000 625000 500000 280000 Cumulative Cash flows =B3 =C3+B4 =C4+B5 =C5+B6 =C6+B7 Payback Period 2+375000/500000 =2+375000/500000 IYears 12 14 year 15 0 16 1 17 2 18 3 19 4 Assuming Initial cash flow is 162500 Cash flows -162500 625000 625000 500000 280000 Cumulative Cash flows =B15 =C15+B16 =C16+B17 =C17+B18 =C18+B19 Payback Period 0+162500/625000 =0+162500/625000 Years