Assuming the investment generates equivalent annual cash


Payback Method

The Happy Day Care Centre is considering an investment that will require an initial cash outlay of $300 000 to purchase non-depreciable assets that have a 10-year life. The organisation requires a minimum four-year payback.

Required - Assuming the investment generates equivalent annual cash flows, what minimum amount of annual cash flows must be generated by the project for the company to make the investment?

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Accounting Basics: Assuming the investment generates equivalent annual cash
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