Eagle company is considering the purchase of an asset for


Question - Eagle Company is considering the purchase of an asset for $100,000. It is expected to produce the following net cash flows.

 

Annual Net Cash Flows

Year 1

$40,000

Year 2

$40,000

Year 3

$35,000

Year 4

$35,000

Year 5

$30,000

The cash flows occur evenly throughout each year. Compute the payback period for this investment.

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Accounting Basics: Eagle company is considering the purchase of an asset for
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