An investment project provides cash inflows of $770 per year for 13 years. a. What is...

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?

Solutions

Expert Solution

Payback period = Initial cost / Annual cash inflows

A) Payback period = 1540 / 770 = 2.00 years

B) Payback period = 5082 / 770 = 6.60 years

C) Payback period = 10780 / 770 = 14.00 years

jeff jeffy answered 2 years ago

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