An investment project provides cash inflows of $645 per year for eight years. Wh

Question

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

What is the project payback period if the initial cost is $1,800? (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 $3,500? (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))

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

Explanation / Answer

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

What is the project payback period if the initial cost is $1,800? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))

Payback period = 2+ (1800-2*645)/645 = 2.79 years

What is the project payback period if the initial cost is $3,500? (Enter 0 if the project never pays back. Round your answer to 2 decimal places. (e.g., 32.16))

  payback period = 5+ (3500-5*645)/645= 5.43 years

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))

Amount recovered in 8 years = 645*8= 5160

Therefore project never pays back

Payback period = 0 year

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

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