A project cost $650 and has cash flows of $150 for the first year, $100 for...

A project cost $650 and has cash flows of $150 for the first year, $100 for the second year, and $80 in each of the subsequent years. What is the payback period of the project?

Expert Solution

Solution :

The payback period of the project is = 7 Years

The cumulative cash inflow of the project is zero in Year 7. This implies that the Initial Investment of $ 650 is recovered in Year 7.

Thus the Payback period of the project is = 7 years

Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.

jeff jeffy answered 1 year ago

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