An investment project provides cash inflows of $660 per year for eight years. a. What is...

An investment project provides cash inflows of $660 per year for eight years.

a.	What is the project payback period if the initial cost is $1,825? (Enter 0 if the project never pays back. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b.	What is the project payback period if the initial cost is $3,550? (Enter 0 if the project never pays back. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
c.	What is the project payback period if the initial cost is $5,400? (Enter 0 if the project never pays back. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Solutions

Expert Solution

Given

Annual even payment = $660

Payback period = Initial cost of the project /Annual cash inflows paid evenly

Project A = 1825/660 = 2.77

Project B = 3550/660 = 5.38

Project C = 5400/660 = 8.18

jeff jeffy answered 2 years ago

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