In: Finance
A project has an initial cost of $54,300, expected net cash inflows of $14,000 per year for 9 years, and a cost of capital of 13%. What is the project's payback period? Round your answer to two decimal place
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| Calculation of pay back period: | |||
| Time | Amount | Cumulative | |
| - | (54,300.00) | (54,300.00) | |
| 1.00 | 14,000.00 | (40,300.00) | |
| 2.00 | 14,000.00 | (26,300.00) | |
| 3.00 | 14,000.00 | (12,300.00) | |
| 4.00 | 14,000.00 | 1,700.00 | |
| 5.00 | 14,000.00 | 15,700.00 | |
| 6.00 | 14,000.00 | 29,700.00 | |
| 7.00 | 14,000.00 | 43,700.00 | |
| 8.00 | 14,000.00 | 57,700.00 | |
| 9.00 | 14,000.00 | 71,700.00 | |
| PBP= 3+12300/14000 | |||
| PBP= 3.88 years | |||