Young Corporation is considering purchasing equipment that costs $80,000 and is expected to provide the following cash inflows over its five-year useful life: Year Cash inflow 1 $ 18,000 2 22,000 3 24,000 4 16,000 5 9,000 What is the payback period of this investment project

It will take 4 years to cover the initial investment.

Explanation:

Giving the following information:

Initial investment= $80,000

Cash flows:

1 $ 18,000

2 22,000

3 24,000

4 16,000

5 9,000

The payback period is the time required to cover the initial investment:

Year 1= 18,000 - 80,000= -62,000

Year 2= 22,000 - 62,000= -40,000

Year 3= 24,000 - 40,000= -16,000

Year 4= 16,000 - 16,000= 0

It will take 4 years to cover the initial investment.

correct, but each time you dont pay the price of the penalty can increase.

in terms of experimental research, mcdonald’s charging different prices in the two cities relates to