If a proposed expenditure of $80,000 for a fixed asset with a 4-year life has an...
If a proposed expenditure of $80,000 for a fixed asset with a 4-year life has an annual expected net cash flow and net income of $32,000 and $12,000, respectively, the cash payback period is 4 years.
True
False
Homework Answers
Initial investment = $80,000
Annual net cash inflow = $32,000
Annual net income = $12,000
Cash payback period = Initial investment/Annual net cash inflow
= 80,000/32,000
= 2.5 years
'If a proposed expenditure of $80,000 for a fixed asset with a 4-year life has an annual expected net cash flow and net income of $32,000 and $12,000, respectively, the cash payback period is 4 years' - The given statement is false
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