Asked by katherine alvarez on Jun 04, 2024
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A project has estimated annual net cash flows of $60,000. It is estimated to cost $240,000. Determine the cash payback period.
Cash Payback Period
The time it takes for an investment to generate enough cash flow to recoup the initial outlay.
Net Cash Flows
The difference between the cash inflows and outflows in a company during a specific period, reflecting the company’s overall liquidity position.
Estimated Cost
An approximation of the cost to complete a project, task, or transaction, made in the absence of full information.
- Calculate and interpret the criticality of the cash payback period within investment decision processes.
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Learning Objectives
- Calculate and interpret the criticality of the cash payback period within investment decision processes.