An investment project provides cash inflows of $630 per year for eight years. Wh

Question

An investment project provides cash inflows of $630 per year for eight years. What is the project payback period if the initial cost is $1,575? What if the initial cost is $3,175? What if it is $5,300?

What is the project payback period if the initial cost is $1,575? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))

What is the project payback period if the initial cost is $3,175? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))

What is the project payback period if the initial cost is $5,300? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))

What is the project payback period if the initial cost is $1,575? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

a)

intial investment = 1575

cash inflow = 630

payback period = intial investment / cash inflow = 2.5 years

b)

intial investment = 3175

cash inflow = 630

payback period = intial investment / cash inflow = 5.04 years

c) intial investment = 5300

cash inflow = 630

payback period = intial investment / cash inflow = 8.41years

since it is greater than 8 yearts

payback period = 0

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