Ryan Manufacturing is considering acquiring another facility for a cost of $610,000. The required payback period is 4.5 years. Assume annual net cash inflows are $160,000 for the first two years and $125,000 for years 3 and 4. What must the inflow be in the fifth year to meet the 4.5 year payback period?

Question

Quizplus · Accepted Answer

$320,000 + $250,000 + .5X = $610,000; X = $80,000

Ryan Manufacturing Is Considering Acquiring Another Facility for a Cost