Calculating Payback using Excel(2) (1).xls

Calculating Payback using Excel(2) (1).xls - Alternative...

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Alternative Solution for Problem 2 Pg. 162 Unrecovered Cost Years Cash Flows ($3,200) ($4,800) ($7,300) 1 $790 ($2,410) ($4,010) ($6,510) 2 $790 ($1,620) ($3,220) ($5,720) 3 $790 ($830) ($2,430) ($4,930) 4 $790 ($40) ($1,640) ($4,140) 5 $790 ($850) ($3,350) 6 $790 ($60) ($2,560) 7 $790 ($1,770) 8 $790 ($980) Payback is determined using the following formula: Payback when initial cost is $3,200: = 4.05 years Payback when initial cost is $4,800: = 6.08 years Payback when initial cost is $7,300 cannot be determined since the cash flows stop in year eight. (Number of years before full recovery of original investment) + ((Unrecovered cost at start of full recovery year)/(Total cash flow during full recovery year)) 4 + ($40/$79 0) 6 + ($60/$79 0)
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Alternative Solution for Problem 3 Pg. 162 Unrecovered Cost
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