Page 361 - F2 - MA Integrated Workbook STUDENT 2018-19

Capital budgeting

Test your understanding answers

Test your understanding 1

4
V = $2,000 × 1.06 = $2,524.95

Test your understanding 2

-3
X = 5,000 × 1.08 = $3,969.16

Test your understanding 3

1,000,000
Payback period = ————— = 3.33 years or 3 years 4 months
300,000

353