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? (Enter 0 if the project never pays back. Round your answer to 2 decimal places, e.g., 32.16.) Payback period years 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.) Payback period 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.) Payback period years

Explanation / Answer

Pay back Period => Initial Investment/ Cash Inflow per period

=> 1575 / 630 = 2.5 years

If Initial investment is $1575 then Payback Period is => 2.5 years

Initial Investment => 3175

pay back period => 3175 / 630 => 5.04 years

If Initial investment is $3175 then Payback Period is => 5.04 years

initial invetsment => 5300

pay back period => 5300/630 => 8.41 yeras

If Initial investment is $5300 then Payback Period is => 8.41 years

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