An investment project provides cash inflows of $615 per year for eight years. Wh

Question

An investment project provides cash inflows of $615 per year for eight years. What is the project payback period if the initial cost is $1,600? What if the initial cost is $3,200? What if it is $5,200?

What is the project payback period if the initial cost is $1,600? (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 $3,200? (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 $5,200? (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 $615 per year for eight years. What is the project payback period if the initial cost is $1,600? What if the initial cost is $3,200? What if it is $5,200?

Explanation / Answer

Payback period:

= Initial cost ÷ Cash flows per period

a)

= $1,600÷$615

= 2.6 years

b)

= $3,200÷$615

= 5.2 years

c)

= $5,200÷$615

= 8.46 years

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