Determine cash inflows occur evenly throughout the year

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Cyrus Inc. was considering an investment in the following project:

Required initial investment                                                     $1,070,000

Net annual after-tax cash inflow                                                $160,000

Annual depreciation expense (($1,070,000 - $165,000)/20 years)       $45,250

Estimated salvage value                                                               $165,000

  • Life of the project in years 20

Question 1: Assume that cash inflows occur evenly throughout the year. The estimated payback period in years (rounded to one decimal place) for the proposed project is:

Reference no: EM132468010

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