In: Finance

An investment project provides cash inflows of $735 per year for eight years. |

What is the project payback period if the initial cost is
$1,950? |

Payback period | years |

What is the project payback period if the initial cost is
$3,800? |

Payback period | years |

What is the project payback period if the initial cost is
$5,900? |

Payback period | years |

Payback period is the number of years it takes to re-earn the initial cash investment.

Per year cash inflow = $735 for 8 years

**Question 1:**

Cash investment = $1,950

In year 1, cash flow = $735

In year 2, cash flow = $735. Cumulative cash flow = $735 * 2 = $1470. Amount required to complete payback = $1950 - $1470 = $480

Fraction of year 3 = $480/$735 = 0.65 year

Hence, payback = 2 + 0.65 years = **2.65 years**

**Question 2:**

Cash investment = $3,800

In year 1, cash flow = $735

In year 2, cash flow = $735. Cumulative cash flow = $735 * 2 = $1470.

In year 3, cash flow = $735. Cumulative cash flow = $735 * 3 = $2205.

In year 4, cash flow = $735. Cumulative cash flow = $735 * 4 = $2940.

In year 5, cash flow = $735. Cumulative cash flow = $735 * 5 = $3675.

Amount required to complete payback = $3800 - $3675 = $125

Fraction of year 6 = $125/$735 = 0.17 year

Hence, payback = 5 + 0.17 years = **5.17 years**

**Question 3:**

Cash investment = $5,900

In year 1, cash flow = $735

In year 2, cash flow = $735. Cumulative cash flow = $735 * 2 = $1470.

In year 3, cash flow = $735. Cumulative cash flow = $735 * 3 = $2205.

In year 4, cash flow = $735. Cumulative cash flow = $735 * 4 = $2940.

In year 5, cash flow = $735. Cumulative cash flow = $735 * 5 = $3675.

In year 6, cash flow = $735. Cumulative cash flow = $735 * 6 = $4410.

In year 7, cash flow = $735. Cumulative cash flow = $735 * 7 = $5145.

In year 8, cash flow = $735. Cumulative cash flow = $735 * 8 = $5880.

Given the cumulative cash flow never exceeds the initial investment, so payback would never complete.

Hence, payback = **0**

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...

An investment project provides cash inflows of $645 per year for
eight years.
a.)What is the project payback period if the initial cost is
$1,800?
b.) What is the project payback period if the initial cost is
$3,500?
c.) What is the project payback period if the initial cost is
$5,300?

An investment project provides cash inflows of $770 per year for
13 years.
a. What is the project payback period if the initial cost is
$1,540?
b. What is the project payback period if the initial cost is
$5,082?
c. What is the project payback period if the initial cost is
$10,780?

An investment project provides cash inflows of $590 per year for
11 years.
a. What is the project payback period if the initial cost is
$1,770?
b. What is the project payback period if the initial cost is
$4,366?
c. What is the project payback period if the
initial cost is $7,080?

An investment project provides cash inflows of $675 per year for
8 years. What is the project payback period if the initial cost is
$1,700?

An investment project provides cash flows of $640 per year for 8
years. a) What is the payback if the initial outlay is $2,700? b)
What if the initial outlay is $3,900? c) Will the initial outlay be
recovered before the end of the project if it is $6,800?

A project with an initial investment of $46,000 and cash inflows
of $11,000 a year for six years, calculate NPV given a required
return of 12%/year.
Select one:
a. $888
b. -$347
c. -$1,205
d. -$775
e. $1,699

A project that provides annual cash flows of $17673 for eight
years costs $80339 today. What is the NPV for the project if the
required return is 19 percent? (Negative amount should be indicated
by a minus sign. Round your answer to 2 decimal places. (e.g.,
32.16))

A project will produce cash inflows of $1,750 a year for four
years. The project initially costs $10,600 to get started. In year
five, the project will be closed and as a result should produce a
cash inflow of $8,500. What is the net present value of this
project if the required rate of return is 14.75%?
-$1,306.18
-$935.56
$5,474.76
$1,011.40

Project L costs $35,000, its expected cash inflows are $12,000
per year for 8 years, and its WACC is 12%. What is the project's
MIRR? Round your answer to two decimal places. Do not round your
intermediate calculations.

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