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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