Beyer Company is considering the purchase of an asset for $250,000. It is expected to produce the following net cash flows. The cash flows occur evenly throughout each year. Year 1 Year 2 Year 3 Year 4 Year 5 Total Net cash flows $ 50,000 $ 36,000 $ 60,000 $ 130,000 $ 24,000 $ 300,000 Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your payback period to 2 decimal places.)

Beyer Company is considering the purchase of an asset for $250,000. It is expected to produce the following net cash flows. The cash flows occur evenly throughout each year.

	Year 1				Year 2				Year 3				Year 4				Year 5				Total
Net cash flows		$	50,000			$	36,000			$	60,000			$	130,000			$	24,000			$	300,000

Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your payback period to 2 decimal places.)

	Annual Net Cash Flows				Cumulative Cash Flows
Year 1		$	50,000			$	-200,000
Year 2			36,000				-164,000
Year 3			60,000				-104,000
Year 4			130,000				26,000
Year 5			24,000				50,000

Cost of investment	$	250,000
Paid back in years 1-3		-104,000
Paid back in year 4	$	104,000

		Amount paid back in year 4		$104,000
Part of year	=		=		=	0.80
		Net cash flow in year 4		$130,000

Payback period = 3 + 0.80 = 3.80 years, (or nearly 3 years and 9 months)