| Investment Appraisal - Exercise 3.11 | Unnamed: 1 | Unnamed: 2 | Unnamed: 3 | Unnamed: 4 | SOLUTION |
|---|---|---|---|---|---|
| Net Cash Flow | Cumulative Cash Flow | ||||
| Year 1 | 40000 | 40000 | |||
| Year 2 | 160000 | 200000 | |||
| Year 3 | 180000 | 380000 | |||
| Year 4 | 180000 | 560000 | |||
| Year 5 | 80000 | 640000 | |||
| The £400,000 is paid back during Years 3 and 4. | |||||
| Payback Period = | 3 years + (£20,000 / £180,000) x 365 days | ||||
| 3 years 41 days |