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Project L costs $70,000, its expected cash inflows are $10,000 per year for 9 years, and...
Project L costs $70,000, its expected cash inflows are $10,000 per year for 9 years, and its WACC is 10%. What is the project's payback? Round your answer to two decimal places.
Solutions
Expert Solution
| Calculation of payback period: | ||
| Time | Amount | Cumulative |
| - | (70,000.00) | (70,000.00) |
| 1.00 | 10,000.00 | (60,000.00) |
| 2.00 | 10,000.00 | (50,000.00) |
| 3.00 | 10,000.00 | (40,000.00) |
| 4.00 | 10,000.00 | (30,000.00) |
| 5.00 | 10,000.00 | (20,000.00) |
| 6.00 | 10,000.00 | (10,000.00) |
| 7.00 | 10,000.00 | - |
| 8.00 | 10,000.00 | 10,000.00 |
| 9.00 | 10,000.00 | 20,000.00 |
| 10.00 | 10,000.00 | 30,000.00 |
| 11.00 | 10,000.00 | 40,000.00 |
| Payback period is 7 years |
jeff jeffy answered 1 year agoRelated Solutions
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