Problem-Solving Example 11.

2 Payback Reciprocal Use the facts in Problem-Solving Example

11.1, and count on that the organization become capable of promote the undertaking for
$500,000 in yr 10. Calculate the undertaking’s go back on funding via way of means of the usage
of the payback reciprocal method. Solution Return on funding is 34%. Yearly coins flows
$120,000 10 years = $1,200,000 Residual price 500,000 Total coins inflows $1,700,000 Average
every year coins inflows $1,700,000 ÷ 10 = $ 170,000 Return on funding: $170,000 ÷ $500,000 =
34%