Tallahassee Company is considering an investment in a high-quality blueprint printer with the following cash flows:
|
Year
|
Investment
|
Cash Inflow
|
|
1
|
($38,000)
|
$2,000
|
|
2
|
(6,000)
|
4,000
|
|
3
|
|
8,000
|
|
4
|
|
9,000
|
|
5
|
|
12,000
|
|
6
|
|
10,000
|
|
7
|
|
8,000
|
|
8
|
|
6,000
|
|
9
|
|
5,000
|
Required:
a) Determine the payback period of the investment.
b) Would the payback period be affected if the cash inflow in year 8 was $18,000?